Kinley Ford Lawsuit: GM Financial Judgment and Bankruptcy

The Kinley Ford lawsuit picture is not one case but several. The Pennsylvania dealership and its affiliated entities have been sued by GM Financial, Ford Motor Credit, and a former business partner, and one of those cases produced a federal judgment of more than $38 million against the dealership, its holding company, and its principal, Steven Kahlon. Kahlon has since filed for personal Chapter 7 bankruptcy, the Hamburg store has laid off employees and shown signs of closure, and the litigation is still moving.

Who Kinley Ford Is

Kinley Ford in Hamburg, Pennsylvania, and its sister store Kinley Chevrolet in Mount Joy were built out of the former Whitmoyer Auto Group, a family-run operation of more than 35 years acquired by Kinley Automotive Group.¹ Both dealerships operate under KinleyCo Ventures Inc., with Steven Kahlon as principal.²

Court filings describe Kinley Ford LLC as a Texas-registered entity that owns two subsidiaries, George D. Manderbach Inc. and GDM Leasing Inc. Kahlon reportedly affirmed an organizational chart showing that hierarchy, though the precise relationship between the Texas LLC and the Pennsylvania storefronts has been contested across the litigation.³

The GM Financial Case and the $38.2 Million Judgment

In spring 2025, GM Financial sued Kinley Chevrolet, KinleyCo Ventures, and Kahlon in federal court in Pennsylvania, alleging default on floorplan financing obligations exceeding $37 million. The core accusation: the dealership had sold hundreds of vehicles “out of trust,” selling cars funded by GM Financial’s floorplan program without repaying the lender for them. GM Financial also alleged the dealership hid vehicle sales and kept the proceeds. The parties had set up a $1 million weekly payment plan earlier that year, and GM Financial said the dealership fell behind on that as well.²

On April 16, 2025, U.S. District Judge Mitchell Goldberg issued a temporary order letting GM Financial repossess its collateral and requiring the dealership to turn over vehicle keys and documentation. That order was extended on April 29, 2025.² The dealership’s attorney called the situation a “financial misunderstanding,” contending that GM Financial had charged incorrect interest and fees and had misreported interest to the IRS, and said he expected the parties to reach an “amicable agreement.”⁴

The case ran on a parallel track under the name of GM Financial’s subsidiary, AmeriCredit Financial Services Inc., which filed suit in the Eastern District of Pennsylvania against Whitmoyer Chevrolet Inc., KinleyCo Ventures, and Kahlon for replevin, breach of contract, and confession of judgment. On May 28, 2025, Judge John M. Gallagher entered judgment for AmeriCredit against all three defendants in the amount of $38,245,090.45, plus accruing interest, costs, and fees.⁵

AmeriCredit then registered the judgment as a foreign judgment in July 2025 and sought a writ of execution, including a charging order against an LLC allegedly controlled by Kahlon. A judge denied that motion without prejudice, requiring more evidence that Kahlon controlled the entity.⁶

What “Selling Out of Trust” Means

Floorplan financing is how most dealerships fund their inventory. A lender pays the manufacturer for vehicles, and the dealer holds and sells them under a trust arrangement: when a car sells, the proceeds go straight back to the lender to retire the loan on that specific car.⁷ Selling “out of trust” is when the dealer sells the vehicle but keeps the money instead of paying the lender.

Done intentionally, it is treated as a form of bank fraud and can lead to criminal prosecution, prison time, and restitution orders. Dealerships caught in out-of-trust situations are often forced to close or file for bankruptcy.⁸ Even when unintentional, the dealer can face civil suits and potential loss of its dealer license.⁹

Ford Motor Credit’s Separate Lawsuit

GM Financial wasn’t the only lender to sue. Ford Motor Credit Company LLC filed its own case against George D. Manderbach Inc. and other defendants in the Eastern District of Pennsylvania, case number 5:25-cv-02816.¹⁰ George D. Manderbach Inc. is one of the entities in the Kinley corporate structure, owned by Kinley Ford LLC according to filings in the Chandra litigation.³ On December 19, 2025, a suggestion of bankruptcy was filed in the Ford Motor Credit case on behalf of Kahlon, indicating he had filed personal Chapter 7 in the Middle District of Pennsylvania.

Sanjay Chandra’s Ownership Dispute

Before the lender cases erupted, another fight was already running. Sanjay Chandra sued in the 352nd Judicial District Court of Tarrant County, Texas, alleging he had invested millions of dollars into several dealerships with Kahlon in exchange for co-equal ownership of the businesses. The lawsuit named GDM Leasing Inc., George D. Manderbach Inc., Kahlon, KinleyCo Ventures, and Kinley Ford LLC. Chandra’s claims include breach of contract tied to a “Kinley Ford Term Sheet,” a “KinleyCo Promissory Note,” and a “KinleyCo Shareholder Agreement,” along with claims for declaratory judgment and fraud.³

The defendants removed the case to federal court in the Northern District of Texas, but in October 2024 Judge Reed C. O’Connor granted Chandra’s motion to remand, sending it back to state court.¹¹

The Short-Lived Kinley Ford Bankruptcy

In May 2025, Kinley Ford LLC itself filed Chapter 7 in the Northern District of Texas, case number 4:25-bk-41893, with Judge Mark X. Mullin presiding and John Dee Spicer as trustee. It was classified as a “no asset” case.¹²¹³

Chandra moved fast. He obtained relief from the automatic stay on June 27, 2025, letting him continue his claims against Kinley Ford LLC outside the bankruptcy, and he filed a motion to dismiss the case entirely, supported by a 1,167-page witness and exhibit list. Kinley Ford LLC filed a 150-page objection, but the trustee filed an unopposed response to Chandra’s motion. On July 8, 2025, the court entered an agreed order dismissing the bankruptcy case without prejudice, and the case was terminated on August 11, 2025.¹²¹³ The court records do not contain a formal finding on whether the bankruptcy was filed in bad faith.

Layoffs and Closure Signs at the Hamburg Store

On October 2, 2025, Kinley Ford in Hamburg laid off nearly four dozen employees. The dealership showed signs indicating it was closed. Ownership said it was “restructuring the organization and selling a couple brands” and planned to “appoint new board members.”¹⁴

Where the Cases Stand Now

Kahlon filed personal Chapter 7 bankruptcy in the Middle District of Pennsylvania on December 19, 2025, case number 5:25-bk-03605, and suggestions of bankruptcy were filed the same day in the AmeriCredit and Ford Motor Credit cases.¹⁰⁵

That filing did not end the litigation. A notice of appeal in the AmeriCredit case was filed on January 5, 2026, and district court activity continued through at least April 2026.⁵ The $38.2 million judgment remains on the books with the appeal pending, and Chandra’s Texas state court case is still active, with his legal team pursuing discovery across multiple jurisdictions.

1
Dave Cantin Group. Whitmoyer Buick Chevrolet Ford PA
2
GM Authority. GM Financial Claims Pennsylvania Dealership Owes It $37 Million
3
Midpage. Chandra v. GDM Leasing Inc.
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Automotive News. GM Financial Chevy Dealer Misunderstanding
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CourtListener. AmeriCredit Financial Services Inc. v. Whitmoyer Chevrolet Inc.
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PACER Monitor. AmeriCredit Financial Services Inc. v. Whitmoyer Chevrolet Inc. et al
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Office of the Comptroller of the Currency. Floor Plan Lending – Comptroller’s Handbook
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Automotive News. Think Floorplan Fraud Is Gone? Think Again
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AutoFinance. Dealer Floorplan Financing Glossary
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PACER Monitor. Ford Motor Credit Company LLC v. George D. Manderbach Inc. et al
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CourtListener. Chandra v. GDM Leasing Inc.
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Inforuptcy. Bankruptcy Case Kinley Ford LLC
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PACER Monitor. Kinley Ford LLC
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NewsBreak. Kinley Ford Lays Off Dozens of Employees