Former Toyota USA COO Jim Press is in some deep financial doo-doo
09-18-09, 01:02 PM
#1
Lead Lap
Thread Starter
Join Date: Nov 2003
Location: Florida
Posts: 693
Likes: 0
Received 0 Likes
on
0 Posts
Former Toyota USA COO Jim Press is in some deep financial doo-doo
Chrysler exec Jim Press owes IRS, credit union more than $1.4M
Robert Snell / The Detroit News
Chrysler Group LLC Deputy Chief Executive Jim Press owes the IRS almost $1 million in delinquent taxes and is being sued by his credit union for defaulting on a $609,000 loan, according to records obtained by The Detroit News.
Oakland County records chronicle the toll financial industry turmoil and the automobile industry collapse have taken on one of its top executives, whose financial woes mirror those of blue-collar workers and average Joes living paycheck to paycheck -- only on a much grander scale. He recently hired a lawyer, Wallace Handler, who specializes in bankruptcy cases.
Handler and Chrysler spokeswoman Shawn Morgan declined comment this morning.
Last November, as the auto industry teetered on the brink of bankruptcy, and as Press lobbied senators to support a $25 billion bailout package, he was caught in his own financial trap, records show.
That month, Press defaulted on a $609,286 loan from Western Federal Credit Union and was pleading for more time. In a letter dated Nov. 11, 2008, and drafted on Chrysler stationary, Press blamed his money problems on the Auburn Hills automaker eliminating his year-end bonus and said two banks refused to loan him more money or refinance his home.
"In this terrible credit environment, I have exhausted other avenues of getting a new loan which would allow me to pay you off," Press wrote in the letter, obtained by The Detroit News. "My last and least desirable alternative is to notify you of the situation."
The letter was written the same week as his company launched a formal campaign to mobilize groups including employees, suppliers and dealers to contact congressional representatives on the importance of saving the auto industry and Chrysler.
It is rare for a highly paid executive to run into such financial problems, said executive compensation expert Paul Dorf, managing director of Compensation Resources, Inc. in New Jersey.
"Normally we don't think people who are making multi-millions of dollars are getting into that problem," he said. "The reality is people who make very little and people who make very much all get into financial problems. It is an anomaly that it came to light."
According to Oakland County Circuit Court records, Press had an unsecured personal line of credit with Toyota Federal Credit Union until the credit union merged with Western Federal in September 2007. Western Federal ended the practice of extending unsecured lines of credit and asked Press to pay off the loan, according to Press' letter.
Press didn't have the cash, however.
He asked for more time and the credit union agreed. He owed $816,000 and agreed to make four payments starting in June 2008, according to court records.
By August 2008, Press had repaid $410,000 but defaulted in November after failing to make the first of two $203,000 payments, court records indicate.
In the Nov. 11 letter, Press explained why.
"I am not able to make the November and February payments due to the elimination of bonuses, which was just announced by my company," Press wrote. "The basis of my agreement to make the November and February payments was the pending receipt of my year end bonus."
The bonus was eliminated as the auto industry tumbled to historic lows and amid Congressional backlash after CEOs of Detroit's three carmakers flew on private jets to Washington, D.C., to seek emergency financing.
It had been 14 months since Press was wooed away from Toyota Motor Corp. to run Chrysler's troubled sales operations.
Press joined Chrysler LLC in September 2007 as vice chairman and co-president, which was considered a coup because of his success at the Japanese automaker. But it was a costly coup as Press received a compensation package reportedly worth at least $50 million -- including a reported stake in Chrysler, which would have plummeted in value after the automaker filed bankruptcy April 30.
He was counting on a continued payday when he wrote Western Federal and asked for more time to repay the loan.
"My employment is not in jeopardy, and I still have monthly income to service the note as President and Vice Chairman of Chrysler LLC," Press wrote in the letter last November.
But last month, Chrysler announced Press will leave the automaker by year's end in a management shakeup under new Chief Executive Sergio Marchionne.
Dorf said the lawsuit and lien are an embarrassment for Press and Chrysler -- and may have factored into his departure.
"They don't need an embarrassment like that," he said. "If the company is saying, 'Wait a minute, we're considered the pariah of the auto industry for the kinds of changes we've made, the way we've had to lay off thousands of workers, plants and all that, you're supposed to be above the fray.'"
Despite Press' plea, the credit union sued him on June 30 in Oakland County Circuit Court for more than $467,000.
"Despite the demands for full payment by plaintiff and plaintiff's counsel, defendant has failed to pay...," Western Federal's lawyers wrote in a court filing.
Court records show the process server was unable to serve Press with a copy of the lawsuit.
The server went to his Birmingham home five times. Each time, there was no answer at the door, according to court records.
The server then went to Chrysler headquarters in Auburn Hills, but was turned away.In the letter to Western Federal, Press blamed the default on a "cash flow issue."
But records show he has other apparent financial problems.
The IRS filed a $947,410 lien against Press and his wife, Suwichada, on Sept. 1 claiming the Birmingham couple owes unpaid income taxes from 2007, according to Oakland County Register of Deeds records.
A lien is filed when taxes haven't been paid and gives the government a legal claim to a person's or company's property. Liens serve as security or payment for the tax debt.
The address listed on the tax lien is a 6,800 square-foot, six-bedroom New England-style mansion Press bought last year in Birmingham. He took out a $2.2 million mortgage in May 2008, according to Oakland County property records.
Press is trying to sell the home for $3.15 million and has listed it with SKBK Sotheby's International Realty of Birmingham.
It is the latest asset Press has tried to unload during the recession.
Press recently sold his New York City townhouse for a reported $14.995 million, according to the real-estate Web site www.streeteasy.com.
Public records show he bought the four-story townhouse off Park Avenue for $13.5 million in December 2007.
New York City property records show Press and his wife got a $12.96 million mortgage from Cerberus Capital Management II L.P., an affiliate of Chrysler-parent Cerberus Capital Management, L.P.
He also owns a $470,000 condominium in New Orleans near the French Quarter, records show.
http://detnews.com/article/20090918/...ore+than+$1.4M
As Ryan (Flipside909) and I were saying, Jim Press made a huge mistake leaving Toyota for Chrysler...
Robert Snell / The Detroit News
Chrysler Group LLC Deputy Chief Executive Jim Press owes the IRS almost $1 million in delinquent taxes and is being sued by his credit union for defaulting on a $609,000 loan, according to records obtained by The Detroit News.
Oakland County records chronicle the toll financial industry turmoil and the automobile industry collapse have taken on one of its top executives, whose financial woes mirror those of blue-collar workers and average Joes living paycheck to paycheck -- only on a much grander scale. He recently hired a lawyer, Wallace Handler, who specializes in bankruptcy cases.
Handler and Chrysler spokeswoman Shawn Morgan declined comment this morning.
Last November, as the auto industry teetered on the brink of bankruptcy, and as Press lobbied senators to support a $25 billion bailout package, he was caught in his own financial trap, records show.
That month, Press defaulted on a $609,286 loan from Western Federal Credit Union and was pleading for more time. In a letter dated Nov. 11, 2008, and drafted on Chrysler stationary, Press blamed his money problems on the Auburn Hills automaker eliminating his year-end bonus and said two banks refused to loan him more money or refinance his home.
"In this terrible credit environment, I have exhausted other avenues of getting a new loan which would allow me to pay you off," Press wrote in the letter, obtained by The Detroit News. "My last and least desirable alternative is to notify you of the situation."
The letter was written the same week as his company launched a formal campaign to mobilize groups including employees, suppliers and dealers to contact congressional representatives on the importance of saving the auto industry and Chrysler.
It is rare for a highly paid executive to run into such financial problems, said executive compensation expert Paul Dorf, managing director of Compensation Resources, Inc. in New Jersey.
"Normally we don't think people who are making multi-millions of dollars are getting into that problem," he said. "The reality is people who make very little and people who make very much all get into financial problems. It is an anomaly that it came to light."
According to Oakland County Circuit Court records, Press had an unsecured personal line of credit with Toyota Federal Credit Union until the credit union merged with Western Federal in September 2007. Western Federal ended the practice of extending unsecured lines of credit and asked Press to pay off the loan, according to Press' letter.
Press didn't have the cash, however.
He asked for more time and the credit union agreed. He owed $816,000 and agreed to make four payments starting in June 2008, according to court records.
By August 2008, Press had repaid $410,000 but defaulted in November after failing to make the first of two $203,000 payments, court records indicate.
In the Nov. 11 letter, Press explained why.
"I am not able to make the November and February payments due to the elimination of bonuses, which was just announced by my company," Press wrote. "The basis of my agreement to make the November and February payments was the pending receipt of my year end bonus."
The bonus was eliminated as the auto industry tumbled to historic lows and amid Congressional backlash after CEOs of Detroit's three carmakers flew on private jets to Washington, D.C., to seek emergency financing.
It had been 14 months since Press was wooed away from Toyota Motor Corp. to run Chrysler's troubled sales operations.
Press joined Chrysler LLC in September 2007 as vice chairman and co-president, which was considered a coup because of his success at the Japanese automaker. But it was a costly coup as Press received a compensation package reportedly worth at least $50 million -- including a reported stake in Chrysler, which would have plummeted in value after the automaker filed bankruptcy April 30.
He was counting on a continued payday when he wrote Western Federal and asked for more time to repay the loan.
"My employment is not in jeopardy, and I still have monthly income to service the note as President and Vice Chairman of Chrysler LLC," Press wrote in the letter last November.
But last month, Chrysler announced Press will leave the automaker by year's end in a management shakeup under new Chief Executive Sergio Marchionne.
Dorf said the lawsuit and lien are an embarrassment for Press and Chrysler -- and may have factored into his departure.
"They don't need an embarrassment like that," he said. "If the company is saying, 'Wait a minute, we're considered the pariah of the auto industry for the kinds of changes we've made, the way we've had to lay off thousands of workers, plants and all that, you're supposed to be above the fray.'"
Despite Press' plea, the credit union sued him on June 30 in Oakland County Circuit Court for more than $467,000.
"Despite the demands for full payment by plaintiff and plaintiff's counsel, defendant has failed to pay...," Western Federal's lawyers wrote in a court filing.
Court records show the process server was unable to serve Press with a copy of the lawsuit.
The server went to his Birmingham home five times. Each time, there was no answer at the door, according to court records.
The server then went to Chrysler headquarters in Auburn Hills, but was turned away.In the letter to Western Federal, Press blamed the default on a "cash flow issue."
But records show he has other apparent financial problems.
The IRS filed a $947,410 lien against Press and his wife, Suwichada, on Sept. 1 claiming the Birmingham couple owes unpaid income taxes from 2007, according to Oakland County Register of Deeds records.
A lien is filed when taxes haven't been paid and gives the government a legal claim to a person's or company's property. Liens serve as security or payment for the tax debt.
The address listed on the tax lien is a 6,800 square-foot, six-bedroom New England-style mansion Press bought last year in Birmingham. He took out a $2.2 million mortgage in May 2008, according to Oakland County property records.
Press is trying to sell the home for $3.15 million and has listed it with SKBK Sotheby's International Realty of Birmingham.
It is the latest asset Press has tried to unload during the recession.
Press recently sold his New York City townhouse for a reported $14.995 million, according to the real-estate Web site www.streeteasy.com.
Public records show he bought the four-story townhouse off Park Avenue for $13.5 million in December 2007.
New York City property records show Press and his wife got a $12.96 million mortgage from Cerberus Capital Management II L.P., an affiliate of Chrysler-parent Cerberus Capital Management, L.P.
He also owns a $470,000 condominium in New Orleans near the French Quarter, records show.
http://detnews.com/article/20090918/...ore+than+$1.4M
As Ryan (Flipside909) and I were saying, Jim Press made a huge mistake leaving Toyota for Chrysler...
Last edited by jruhi4; 09-18-09 at 01:22 PM.
this guy was in every car mag for doing such a great job for Toyota, left for Chrysler as encore stated for more money and now this
09-18-09, 04:25 PM
#6
Lead Lap
Thread Starter
Join Date: Nov 2003
Location: Florida
Posts: 693
Likes: 0
Received 0 Likes
on
0 Posts
Another, much briefer article
Chrysler's Press faces $947,409 lien
U.S. says exec owes taxes from 2007
BY L.L. BRASIER and TIM HIGGINS
DETROIT FREE PRESS BUSINESS WRITERS
Chrysler's Jim Press owes the federal government nearly $1 million in back taxes, according to a lien filed by the U.S. Internal Revenue Service.
Press, Chrysler Group LLC's deputy CEO, and his wife, Suwichada, have an unpaid balance of $947,409.63, according to the lien notice filed with the Oakland County Register of Deeds on Sept. 1.
The lien is against the Press family's home in Birmingham.
The filing said the unpaid balance is for the tax period ending Dec. 31, 2007.
Shawn Morgan, a Chrysler spokeswoman, declined to comment, saying that the matter is personal. Press did not respond for comment through Chrysler's public relations team.
He left Toyota and joined Chrysler in 2007 as a copresident shortly after Cerberus Capital Management took majority ownership of the Auburn Hills automaker.
Chrysler never disclosed the value of Press' compensation package, but Business Week reported in 2007 that it was worth at least $50 million.
http://www.freep.com/article/2009091...--947-409-lien
U.S. says exec owes taxes from 2007
BY L.L. BRASIER and TIM HIGGINS
DETROIT FREE PRESS BUSINESS WRITERS
Chrysler's Jim Press owes the federal government nearly $1 million in back taxes, according to a lien filed by the U.S. Internal Revenue Service.
Press, Chrysler Group LLC's deputy CEO, and his wife, Suwichada, have an unpaid balance of $947,409.63, according to the lien notice filed with the Oakland County Register of Deeds on Sept. 1.
The lien is against the Press family's home in Birmingham.
The filing said the unpaid balance is for the tax period ending Dec. 31, 2007.
Shawn Morgan, a Chrysler spokeswoman, declined to comment, saying that the matter is personal. Press did not respond for comment through Chrysler's public relations team.
He left Toyota and joined Chrysler in 2007 as a copresident shortly after Cerberus Capital Management took majority ownership of the Auburn Hills automaker.
Chrysler never disclosed the value of Press' compensation package, but Business Week reported in 2007 that it was worth at least $50 million.
http://www.freep.com/article/2009091...--947-409-lien
Trending Topics
09-18-09, 05:05 PM
#8
Lexus Champion
Jim Press rolled the dice; if Chrysler would have survived and he could have worked some magic there he stood to make a windfall. Unfortunately the company was in bad shape and the dice came up snakeyes. That's the way it goes. But I'm surprised he got himself so far in debt until he could fully assess what the situation on the ground at Chrysler really was. I would have thought someone like Jim Press would have had more self restraint. After working for Toyota all those years he didn't have any real cash assets available to him? Everything mortgaged? Guess he drank Chrysler's Kool-Aid and believed that he was a miracle worker and the party would go on forever.
Last edited by Evitzee; 09-18-09 at 09:53 PM.
09-18-09, 10:02 PM
#10
Lexus Champion
Join Date: Sep 2006
Location: MIchigan
Posts: 2,025
Likes: 0
Received 0 Likes
on
0 Posts
Yeah sure...he was the same guy who green lighted the 2nd gen Toyota Tundra/Sequoia disaster....he was also the guy who built the idle Mississipi plant and built all this capacity....he sure did do a good job
09-19-09, 05:49 AM
#13
Pole Position
09-21-09, 10:05 PM
#15
Wow compensation at 10X his annual Toyota salary?!! That was one heck of an inducement. For all his personal financial mistakes, and the general short-sightedness of joining Chrysler, one area Jim Press excels at is that of company showman. His introduction of the 4LS at NAIAS in 2006 was dramatic, attention-grabbing, and very impressive.
As a former head of the Lexus Division, he certainly knew how to run its US operations...and dazzled the audience (they were gasps at some of the LS world-first features, and he used humor and a fun-guy demeanor which entertained)...the product did sell itself in large part, but Mr. Press' showman-style delivery really made the LS 460 launch presentation memorable, IMO.
As a former head of the Lexus Division, he certainly knew how to run its US operations...and dazzled the audience (they were gasps at some of the LS world-first features, and he used humor and a fun-guy demeanor which entertained)...the product did sell itself in large part, but Mr. Press' showman-style delivery really made the LS 460 launch presentation memorable, IMO.