- 14 -
Pursuant to the Administrator Agreement, the Dealerships
were subject to audit by the Administrator, BPI, and Travelers to
verify that their requests for disbursements from the PLRF
accounts complied with these terms. An audit of Alton
Toyota/Dodge in January 1992 called certain claims for repairs
into question and resulted in restitution of payments to the
PLRF. The parties agree that otherwise all payments of reserves
to the Dealerships during the years at issue were made strictly
in accordance with the terms of the Administrator Agreement.
The Administrator Agreement imposed upon the Escrow Trustees
a duty to report the status of the PLRF accounts to the other
parties to the agreement on a monthly basis. Inasmuch as the VSC
purchasers were not parties to the agreement, the Trustees were
not required to report to them.
A separate Escrow Agreement was entered into between the
Escrow Trustees and either Mercantile Bank of St. Louis or
Massachusetts Co., acting as the escrow depository. The Escrow
Agreement provides that the bank will establish Primary Loss
Reserve Fund escrow accounts "for the Dealer Group", and that
"each dealer depositor will be insured pursuant to the
regulations and rules adopted from time to time by F.D.I.C."
Under Automobile Dealers Service Contract Excess Insurance
policies issued by Travelers, each of the Dealerships was
entitled to indemnification for covered losses exceeding the
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011