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Special Report Updated 11:15 AM EDT

CARA Collision and Glass Closes Doors

INSIGHT has learned that CARA Collision and Glass, the Minnesota-based consolidator, has closed its doors over the weekend and filed for Chapter 7 bankruptcy, which calls for immediate liquidation.

Officials at the Marquette Capital Bank, headquartered in Minneapolis, notified CARA management on Thursday, June 8, that they were calling in CARA's notes and seizing their accounts. All operating accounts and assets were seized and all CARA operations were sealed, forcing CARA into Chapter 7 bankruptcy.

With Friday's paychecks unwritten, 250 employees have not been paid for their last two weeks of work at CARA. It is believed that some vehicles were released on which repairs had not been started but many vehicles are still on the premises and will be held until a court-appointed trustee makes a determination as to their fate. Insurance companies may have to sort each case out with the bank for the insureds who may be facing far longer delays than they had anticipated in the collision repair process.

CARA, founded by Randy McPherson after he left ABRA Auto Body and Glass (also founded by McPherson), is based in Fridley, Minnesota, and was in competition in the Minneapolis market with ABRA facilities.

CARA was the fastest growing consolidator in the U.S. during 1998. By December, 1998, CARA had opened 24 facilities in 21 months, with locations in Colorado, Indiana, Nevada and Wisconsin as well as in Minnesota.

However, by December 1999 problems arose. The recently acquired Indiana operations were sold, and it appeared that CARA corporate management was experiencing difficulties in attempting to apply a corporate framework to the farflung CARA empire. Both the bottom line and customer satisfaction levels suffered.

It is hoped that the bankruptcy process will be as painless as possible for CARA's employees, customers, insurer business partners and suppliers. To that end, Marquette Bank did allow CARA technicians to retrieve their personal tools from the sealed premises until noon on Saturday. Concern for consumers whose cars are now in limbo has prompted three of the largest collision repair operations in the Minneapolis market, ABRA Auto Body and Glass, Lehman's Garage, and Masters Collision Group, to offer their assistance to the trustee in facilitating as prompt a repair and return as possible for CARA's captive customers.

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