WEST ALLIS, Wis. – CU Fleet, an automotive leasing dealership co-owned by former Central States Mortgage Co. CEO Dick Jungen filed for Chapter 11 bankruptcy last week, owing almost $3 million to credit unions that were victimized by the closure of the mortgage loan CUSO.
Jungen, the founder of Central States who was fired last July, co-owns the car leasing dealership with its president Tom Burns, according to the bankruptcy filing. The two bought CU Fleet last summer from CSMC Inc., the parent company of Central States.
CSMC acquired CU Fleet in October 2004 to lease vehicles to credit union members in Wisconsin. Under the arrangement, CU Fleet would purchase the vehicle and lease it to the credit union member. At the expiration of the lease, the company would accept the vehicle back and sell it.
CU Fleet’s four secured creditors are Landmark CU, which is owed about $2 million; Prime Financial CU and Guardian CU, which are owned about $800,000 together; and Associated Bank, which is owed $850,000, according to the bankruptcy filing. The three credit unions are among 25 credit union owners of Central States that lost money because of the closure of the mortgage CUSO.
Central States Mortgage is currently in receivership and is in the process of being liquidated.
