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Truck top seller starts over

Towrys try again after losing control of previous firm

Julie Towry says she never intended to leave customers in the lurch witha Chapter 7 liquidation of Truck Tops Plus.

She says she filed a Chapter 13 reorganization in U.S. Bankruptcy Courtto give her time to salvage a business that had grown out of control.

Then the bankruptcy got out of control, she says.

Towry, 40, graduated from Grants Pass High School and moved to Eugene,where she worked at a similar truck accessory business. She moved to Medfordthree years later and opened Truck Tops Plus in 1985.

Consumer protection advocates in the state Attorney General's Officehave been investigating Truck Tops Plus almost continuously since 1989.

That's when Towry says her troubles began, with the acquisition of asimilar business with a manufacturing facility and stores in Portland andEugene.

In 30 days we went from one location to three and from seven employeesto 32, she said. I had a lot of stars in my eyes and a lot ofdreams.

The company's annual sales climbed to $1.2 million, with profits peakingat $147,400, she said. The company was selling custom truck tops and accessoriesfrom the Canadian border to San Francisco.

Meanwhile, she and her husband, Don, had decided they'd like a largefamily.

The business was growing so fast and was so strong financially,I went off and started making babies, she said. I absolutelylost control. I had people running my company and didn't give them a lotof supervision. the time I realized I had a mess on my hands, I didn'tknow how to get out of it.

She also had six children.

Consumer complaints are a chronic problem for the business because itspecializes in customized products, Towry said. Many complaints were relatedto the time it took to obtain custom orders.

We can have problems when they place an order and decide they don'twant it, she said. And it's a very personalized product.

The Attorney General's Office logged 19 consumer complaints in TruckTops Plus' first four years in business, most of them in 1989. Towry signedan assurance of voluntary compliance in 1991 that imposed ruleson refunds, promised delivery dates and written guarantees.

In the two years after the agreement was signed, an additional 29 ofthe company's customers complained to the Attorney General's Office, saidspokeswoman Jan Margosian.

Another investigation was opened and Towry went to Salem to go over thecomplaints one by one.

Margosian said 23 of the complaints were resolved through negotiationswith the company or in small claims court and the investigation was closed.Another investigation was opened in 1994 and continued into the bankruptcy.

I don't want to make light of the complaints, but we were doing300 transactions a month, Towry said. Something like one tenthof — percent of our customers were going away unhappy -- and that's whenwe were having problems.

The company's financial woes were aggravated by an employee in Portlandwho was accused of embezzling $22,000; a key employee in Medford got awaywith $27,000, Towry said. They were charged and convicted, she added.

It was my responsibility, she said. It was my nameon the bottom line. ... It was my poor judgment to hire those people.

Then we got into a dispute with the IRS over payroll liabilities,and that put a strain on us, she said. That liability was amendedupward from about $15,000 to $140,000 during the course of the bankruptcy,she said.

She took her lawyer's advice and filed the Chapter 13 bankruptcy on Oct.31, 1995, seeking to protect the business from creditors while she coulddevelop a plan to return to profitability.

At that time, she listed assets of $568,000, including $492,000 in realestate and debts of $671,255.

The filing lists more than 200 creditors, some of them disputed, somewith unspecified claims. Claims for several thousand dollars were listedfor insurance and utility companies, advertising bills and products.

When contacted this week, some creditors said they're down for old debts;one said he'd given up on collecting seven or eight years ago. An Ashlandcustomer said she was listed as a creditor by mistake.

It's a very complex case, said Michael Grassmueck, the Medfordbankruptcy trustee who's trying to sort out the claims and liquidate theassets.

I had to find a way to go back and get a grip, Towry said.I was told I'd be able to pay all of our debts in two or three months.

She said that led to nine months of hearings, depositions, sworn statementsand reports and a $60,000 lawyer's bill.

I was told I'd be out of bankruptcy by Christmas, she said.Now I'm going into my third Christmas in bankruptcy. Once you getinto this, it's hell to get out of it.

She closed the stores in Portland and Eugene and focused on the Medfordoperation. She said she built sales back to $970,000 for the past year andrestored the business to profitability.

We had three consumer complaints since July 1996 and all of thosewere resolved, she said.

But her plan to reorganize was rejected by the bankruptcy judge, whoordered the business seized and closed on Aug. 15 under a Chapter 7 liquidation.Their home will also be auctioned.

We had it appraised, and there wasn't enough equity in it to haveit seized, she said. But we brought in a different appraiserwho said it was worth more.

Don and Julie Towry remain in business. They've opened Truck Creations,at 3811 Crater Lake Highway, just across the road from the padlocked TruckTops Plus store.

That's the thing about a Chapter 7, she said. Theytake everything from you, but they also let you start over.

She negotiated with vendors to obtain two truckloads of orders destinedfor Truck Tops Plus that were to be abandoned by the bankruptcy trustee,she said.

That's led to some complaints from consumers who'd paid deposits to theprevious company on customized products.

Towry explained that their deposits were seized in the bankruptcy andtheir only recourse is to file a claim with the trustee. She's offeringto sell the products at cost. Those who paid with bank cards didn't losetheir deposits, she added.

Meanwhile, family and friends have loaned her some office supplies andvendors have provided her products to sell. She kept the Truck Tops Plustelephone number.

I've been doing this since 1977, she said. This iswhat I know. I want to stay here and I want to stay in this business. I'ma survivor.

Ray Sherrill installs a canopy on a customer's truck at Truck Creations. Owners Don and Julie Towry are trying to launch a new truck canopy business after the bankruptcy liquidation of Truck Tops Plus in Medford. Julie Towry says she never intended to leave customers in the lurch when the first business, and then the effort to reorganize it, got out of her control. - Photo by Jim Craven</P