Martin Cadillac LLC, known for its ability to attract some of the deepest pockets in the hip-hop industry has filed Chapter 11 bankruptcy after seeing sales nosedive from $72.6 million in 2008 to $60.8 million in 2009.
The dealership had benefited from its star-studded clientele, drawing Diddy (whom you may know better as Puff Daddy or P. Diddy) and fellow rapper Fat Joe to a promotional event last summer. Cadillac - in particular, its Escalade model - has been a vehicle of choice for many hip-hoppers, making appearances in music videos and song lyrics in addition to the artists' own driveways. Cadillac sales were up 42% this past March over the same time last year, and Martin was the top seller of Escalades.
But apparently, Martin Cadillac's star clientele and ability to sell Escalades weren't enough to keep it out of bankruptcy and away from lender trouble. GMAC, now known as Ally Financial, reclaimed some of the vehicles it helped Martin purchase after determining that the dealership had too much inventory and would be unlikely to sell it. But if its dispute with its lender wasn't enough of a sign that the dealership was moving towards bankruptcy, the closing of one of its dealerships and the liquidation of its inventory was a definite sign.
Now in Chapter 11 bankruptcy, Martin Cadillac is reporting $18.4 million in asset and $23.4 million in debts. And while it does not have a post-bankruptcy financing commitment from GMAC, Martin Cadillac has expressed optimism that it will be able to secure a financing commitment from the lender. It is also seeking permission from the bankruptcy court to take various steps so that it can continue to operate its company while going through the Chapter 11 bankruptcy process.