America's Car-Mart in Sale Talks, with Chapter 11 or Shareholder Vote Both on the Table

America’s Car-Mart is in talks to sell itself, with two possible paths on the table: a court-supervised Chapter 11 sale process or a transaction put to a shareholder vote, according to Bloomberg Law.

Car-Mart is one of the largest buy-here-pay-here chains in the country — a model where the dealer both sells the vehicle and carries the loan, typically to borrowers who can’t qualify for conventional financing. That means the company’s balance sheet is loaded with subprime receivables, and any sale or restructuring touches both the equity and the credit side at once.

The choice between a Chapter 11 sale and a shareholder-vote transaction carries real differences in who controls the outcome. A court-supervised sale under Section 363 of the bankruptcy code lets a buyer acquire assets free and clear of existing claims, which can be attractive when there’s creditor complexity — but it also signals that the company and its advisers believe a clean break may be necessary. A shareholder-vote path keeps the process out of bankruptcy court and gives equity holders a formal say, though it typically requires a cleaner balance sheet to execute.

Car-Mart has not disclosed which path it expects to take, and talks are ongoing.

Sources

• America’s Car-Mart in Talks for Sale as Subprime Auto Struggles — Bloomberg Law News