Custom Highline deals with debt

Auto dealer closes while working to settle with creditors

January 15, 2008


Dealership looks to reopen

Lawrence car dealership Custom Highline is looking to reopen next month, as three financial institutions seek to recoup at least $2 million in loans they say they are owed. Enlarge video

Custom Highline, 1527 W. Sixth St., plans to reopen next month, in anticipation of settling debts of at least $2 million. The business is closed, and its vehicles are to be sold at Auto Exchange in Lawrence.

Custom Highline, 1527 W. Sixth St., plans to reopen next month, in anticipation of settling debts of at least $2 million. The business is closed, and its vehicles are to be sold at Auto Exchange in Lawrence.

Custom Highline, a Lawrence business that locates, buys and sells luxury automobiles, is hoping to reopen next month as it works to settle debts with creditors of at least $2 million.

The business, 1527 W. Sixth St., is closed now that its remaining cars have been taken to another Lawrence dealership for sale - with the expected proceeds set to pay off portions of debt owed to Central National Bank and National Bank of Kansas City, Mo.

Zarif Haque, co-owner of Custom Highline, said he and his business partners were working to settle their debts and move forward with new inventory and newfound experience.

"It's a large dispute between inventory financing and a line of credit," Haque said Monday of the civil lawsuit filed late last year by Central National and involving several other parties. "We are taking every step to make all the banks whole.

"We essentially got too big too quick. That's what it comes down to."

Earlier this month, Custom Highline agreed to give possession of its remaining vehicles - what was left of a lineup that had included a variety of Cadillac, Lexus, BMW, Mercedes and Infiniti models - to both Central National and National Bank, in a pact signed off on by Douglas County District Judge Stephen Six.

Documents filed in the case indicate Custom Highline took out a $1.5 million loan from Central National in March 2006 - temporarily expanded to $1.6 million last year - to be used for acquiring vehicles and other property. The bank said that as of Nov. 8, when it filed for and received a restraining order from Six, Custom Highline had nearly $925,000 in inventory securing the loan.

National Bank, meanwhile, has asserted it loaned money in March 2006 to Custom Highline Wholesale, another business co-owned by Haque and his partners that still provides car washes and other services on site. The loan was renewed, in April 2007, by including Custom Highline as a borrower, and the outstanding balance late last year exceeded $600,000, according to the bank.

All 33 vehicles listed by National Bank - doing business as Great American Acceptance Corp. - as collateral for its loan also were included on a longer list of vehicles named as collateral for Central National's loan.

Also in the case, Automotive Finance Corp. - which says it is owed more than $313,000, plus interest - listed seven vehicles as collateral for a loan that it had provided in February 2006 for Custom Highline. All seven of those vehicles also appeared on Central National's collateral list.

Bruce Woner, a Topeka attorney representing Central National, declined to discuss specifics of the case or what effect the overlapping collateral might have on proceedings.

"The matter remains in litigation and, at this moment, the primary parties involved, and their lawyers, are working toward a hoped-for mutual settlement," Woner said.

Custom Highline previously operated at 2441 W. Sixth St., the former home of Rueschhoff Locksmiths and Security Systems. David Rueschhoff is a co-owner of Custom Highline, which had relocated in May 2007 to the larger lot and showroom built at 1527 W. Sixth St., a site formerly home to Quick's Bar-B-Q.

Haque said the operation was online to resume dealing in luxury automobiles in February. He also confirmed that he had ceased operations for another of his business interests -, a Web site advertising and offering coupons for area restaurants - as he focuses on getting Custom Highline up and running again.

"We do intend to get back into business," Haque said of the car operation. "We actually, voluntarily, are restructuring the company and our debts."

In US court

Custom Highline and Custom Highline Wholesale also are facing a civil suit in federal court, this time from a company that says it is owed nearly $104,000 in fees and penalties for equipment leased to the auto sales and service operations at 1527 W. Sixth St.

Leaf Funding Inc. says it has leased $75,000 worth of equipment - from an aligner to work benches - to the operations.

David Rueschhoff, co-owner of Custom Highline and Custom Highline Wholesale, filed a response last week in U.S. District Court, denying that he and co-owner Zarif Haque owe $103,990 to Leaf. He requests a jury trial.

- Mark Fagan


bluerose 7 years ago

is this front page news? really?

am i supposed to care?

Write2Know 7 years ago

I'll bet one of the banks gets the building, and they open a branch office there. I can see it now, "Open a checking account and get a free car wash!"

newsreader 7 years ago

My wife and I bought both our cars there, before they moved to their new locations. The service was significantly better at the old location, much to attentive to the customer. They got this new fancy building and forgot the local people that got them there.

compmd 7 years ago

bluerose (Anonymous) says:

is this front page news? really?

am i supposed to care?

There was extensive discussion regarding what happened to them on another article, bluerose.

thomgreen 7 years ago

That's too bad. I thought they did a nice job of remodeling that building and it had made 6th a tad bit nicer. That stretch of 6th tends to look a little run down with all the older buildings located along it. I hope they can reorganize and open back up.

Bud Stagg 7 years ago

How dare you say "used car salesman" and "fraud" in the same sentence.

These guys took the banks for a ride.

otto 7 years ago

If you take banks for a ride, you take us all for a ride.

kneejerkreaction 7 years ago

My dealings with them were not without pain. Worked things out in the end, have to say. I did wonder why they were building the new place on 6th. Seemed like a big jump for a new company.

Now, I don't wonder anymore.

jgragg 7 years ago

I wonder what bank is going to finance them now.

thomgreen 7 years ago

I wish they would open one up. I could use some cheap home decorations and furniture. Hold said KIA, dang it, I thought you said IKEA....

BigPrune 7 years ago

It's really sad to see them in this situation. Hummers and saleswomen do not mix. I almost spent $40,000.

HighScore 7 years ago

We should turn that location into a drive through BBQ restaurant.

OldEnuf2BYurDad 7 years ago

"I wonder what bank is going to finance them now."

Probably a bank they now owe money to. Sometimes banks would rather bail you out than charge off debt.

jplanet 7 years ago

Oh, you did not just suggest ANOTHER bbq joint, highscore! I seriously hope you were joking :)

CrazyDiamond 7 years ago

Drive thru BBQ would be good or maybe a Vista Burger....

Erin Parmelee 7 years ago

BigPrune (Anonymous) says:

It's really sad to see them in this situation. Hummers and saleswomen do not mix. I almost spent $40,000.

Sooooooo much I could say here............

The_Voice_of_Reason 7 years ago

I like the Greyhound bus station idea.... riches to rags.... kinda ironic.... and the car wash would be great for the homeless, free showers and hot wax! Lawrence could have the nicest looking homeless people this side of the Mississippi!!

Beattheodds 7 years ago

It's too bad that Custom Highline is dealing with a "PIECE OF CRAP" bank like Central National Bank, and Bank President Brad Chindamo. If I were the owners of Custom Highline I would talk to my attorneys about "LENDER LIABILITY"

Good Luck on reopening!

Xwards 7 years ago

I'd like to see Vista make a comeback there.

BigPrune 7 years ago


Yeah, Baby!!!!!

beattheoddsisstupid 7 years ago

Sounds like beattheodds must have defaulted on a loan to and blames the banks for his lack of a realistic business plan.

beattheoddsisstupid 7 years ago

Sounds like beattheodds must have defaulted on a loan too and blames the banks for his lack of a realistic business plan.

kneejerkreaction 7 years ago

toefungus posted that one of the owners was behind the amazingly undefined and confusing

That puts a whole new perspective on what happened to them.

Young, brilliant business entrepreneur...uhuh.

bluerose 7 years ago

sorry (and thanks for the update) compmd.

though a regular online LJW reader, i must have missed the previous article. this just seemed to appear out of nowhere. i guess i still don't care though! (-: luxury cars and million dollar loans are rather out of my peripheral vision these days.

toefungus 7 years ago

"Haque said the operation was online to resume dealing in luxury automobiles in February. He also confirmed that he had ceased operations for another of his business interests -, a Web site advertising and offering coupons for area restaurants - as he focuses on getting Custom Highline up and running again." Dooph didn't work either. Is was doophissy.

OldEnuf2BYurDad 7 years ago

A used car lot being deep in debt... not news.

Blue Harley's comment is interesting to me. We see "Taj Ma Car Lot" as a vibrant business, it's demise is "news"... yet the crappy Vantuyl lot has been around for years. Which of these men is the more impressive entrepreneur?

booklover2 7 years ago

I bought a car from Custom Highline when it was at the old location. The transaction went well and I thought I would probably buy from them again. I was excited to see the new location but was afraid it was maybe "too big, too soon". I hope that they are able to get back on their feet. Like one writer said, it was a nice addition to the area.

gccs14r 7 years ago

Not to mention what has to rank among the dumbest names for a car dealership. It's too corny to be pretentious, but I think pretentiousness was their goal. Besides, there's nothing "highline" about a used Jetta (one of the cars I saw on their lot once). If they were selling customized Ferraris, Lamborghinis, and other exotics, then maybe the name would fit, but it would still suck.

KSChick1 7 years ago

its_getting_warmer (Anonymous) says:

compmd: "There was extensive discussion regarding what happened to them on another article,"

Where compmd? I can not find it.

It's in the article about bidding on the Lawrence Bus Company's auction items-you can find that story on the local news page, towards the bottom

bangaranggerg 7 years ago

Welcome to Lawrence jplanet, highscore was joking because that was the location of a drive through BBQ "Quicks" for like the last 30 years.

Brenda Vantuyl 7 years ago

Vantuyl's would not be a crappy gravel lot if the city was not so difficult to deal with. In any event, it is obvious what happened here.

kneejerkreaction 7 years ago

hawkperchedatriverfront (Anonymous) says: Who would finance a building like that on 6th street a few doors down from Dollar General and a pawn shop and payday Loan, get real.

We can't agree on what happened to Custom Hiline, but the preceding is without a doubt the most stupid comment I've read yet.

Could you tell us, hawkedperch., what is wrong with Dollar General the Pawn Shop and the PayDay Loan businesses? And how do these create a financing conundrum for a bank?

You idiot.

One could only be ucky to own any of the businesses you listed. They are cash cows.

average 7 years ago

I'm trying to understand what the problem is with Dollar General. It's not like there's some underclass you're avoiding by shopping at Wal-Mart. Sometimes, I just need some detergent, cat litter, and a stick of deodorant. I don't want to deal with a 2 acre parking lot, a 2 acre store, a blaring "shopping network", hundreds of people, and a line-up at the register..

It's also pretty hard not to be relatively close to a check cashing place these days.

jgragg 7 years ago

Zarif is a crook. Plain and simple. He stole money from 3 different banks. CNB, a bank in K.C., and a bank in Nevada.

twen 7 years ago

We pre-purchased window tinting for our daughter's car as a x-mas gift and now it appears there's nobody to deliver the service.

Is there anyone else out there who would like to start a class action suit?

newsreader 7 years ago

You want to start a class action suit over 200 bucks?

kmat 7 years ago

beattheodds doesn't know what he/she is talking about. He/she needs to read what lender liability is and then he/she might realize that a lendee breaking a loan contract makes the lendee at fault. A family member of mine works in a loan dept (not at any of the banks defrauded in this case) and actually audits car lots that he has lines of credit with. Highline tried to defraud multiple banks. It's simple. They ask for a line of credit to purchase cars. The banks require that they prove they have the cars they say they purchased with the line of credit. You can't claim the same cars with every bank you manage to get a line of credit with. What did they do with the rest of the money? The money in question has nothing to do with the mortgages they took out for the building.

The owners should be prosecuted and there's a good chance they just may be. Every major car lot in town has to function under the same rules (heck, every business that has a line of credit gets audited on a regular basis and has to do inventories on regular cycles to prove that they have the goods they say they have, that they bought on that revolving line of credit). Almost every company with inventories uses lines of credit. The banks use the items bought against the line of credit as collateral if the lendee defaults on the loan

Also, I've heard warnings that they have acted as a chop shop.

The chances of them reopening are slim to none. Banks won't want to touch them after this. No one should be supporting a company that tries to defraud banks. When banks lose money, guess who end up paying for it in higher fees and higher interest rates?

lessfortunate 7 years ago

It may just be a $200 loss, but that is $200 that someone is out. $200 to a poor person is like someone stealing a brand new hummer right off a car lot. The service was already paid for, so there I believe that the person SHOULD have the right to obtain "something" for the loss of money so they can take their business else where!

kneejerkreaction 7 years ago

Anyone noticed the plight of CH has worsened as the comments lengthens?

kneejerkreaction 7 years ago

If it's not over, let's just say that the impression thereof may get an Academy Award.

howidoit 7 years ago

open a checking and get a free car wash! that sh*it is funny!

thetruth72 7 years ago

Chop shop? Is KMAT an idiot. This is not New York.

KMAT needs a lesson on lender liability. This situation could have never happened if Central National Bank was doing it's job! KMAT, you even wrote "every business with a line of credit get audited on a regular basis and has to do inventories on a regular cycle to prove they have the goods". So did the bank do it's audits? How did the bank allow this to happen? I guess we really do not know who is to blame. There is a lot of speculation going on, but from the outside do any of us know the truth?

beattheodds2 7 years ago

I have dealt with Custom Highline for a few years now, and I think they were great! They were always honest and made me feel important. Seeing as how Lawrence is having difficulties obtaining new businesses that generate tax revenues (I think car dealerships generate a lot of taxes) shouldn't Lawrence support a dealership that must have sold a lot of cars to get where they are now. It seems like they have not have any problems for four years, until they got big. Shouldn't we support our local companies? I wish them the best of luck on reopening!

CorC 7 years ago

Next Day Business Article:

Brad Chindamo Resigns.....

Coincidence? or Consequence?

GringoSabio 7 years ago

En boca cerrada no entran moscas.

Susan Mangan 7 years ago

Made-in-China just made the point he was trying to argue against...

"If you take banks for a ride, you take us all for a ride.

No one takes a ride; the big boys change the rules, people borrow money they shouldn't and things go wrong"

Do you think bank losses happen in a vacuum? It was an example of a lack of oversight on the banks' auditors parts and (it sounds like) fraud on the owners' parts. But bank losses have a domino effect that works down to the average consumer and debtor...the current subprime meltdown you mention is the perfect example. Over 95% of mortgages are still current, and over 85% of subprime mortgages, but the minority that have defaulted have thrown the entire lending business into a tailspin (not to mention the entire economy) and made it difficult, at best, for people with anything but less than perfect credit to qualify for loans at the moment. Lack of lending decreases consumer purchases (whether you can argue whether that's good or bad considering the average debt in this country) which decreases production and output and, eventually, triggers recession.

One small local company defaulting on a few million dollars worth of loans can have a major effect on everyone, eventually, so, to me, at least, it IS news.

its-getting-warmer is right...the odds of seeing any of that $200 again is slim to none. Repayment of debts during restructuring takes place in a specific order, generally, with payroll coming first, secured creditors (the banks) second, and unsecured creditors (those who pre-purchased items) coming last, if anything is left to disperse.

primetime 7 years ago

You guys are wrong about Zarif..He's a great guy and did a number of things to help me during my vehicle transactions. I bought 2 cars from him and planned on buying from him again. I was in a heap of trouble and buried (owed $ on it) in one of my vehicles and he did everything in his power to help me get out of the situation. I ended up making money on my consignment and he was able to sell my car for me at a significant profit in a very timely fashion, even after the consignment fees I walked away with my car fully paid off and 4 more thousand that was profited from the sale. I've seen him do it for others plenty of times. This guy does what he can to help people that need cars. Its that simple.

To the idiot who said that the cars weren't highline..Let me tell you something, when you have an 06 Maseratti spyder with less then 5k miles on it, worth 100 grand and SL55 AMG sitting in the show room..Thats pretty highline...What are you driving mr big shot? Thats what I thought...As far as the Jetta you saw on the lot, its called a trade in, that they turn around and sell. If the vehicle is not a total heap, every single dealership does the same thing. That includes Baron BMW just to name a few..Get a clue...

As far is the location, guys act like Lawrence is leawood or mission hills kansas...There's a check cashing place on every corner of every street in this pot holed ridden city...6th Street location is just as good as any other major street in lawrence..

Mr Haque is a good guy and deserves a chance to get his business back up and running again.

Richard Andrade 6 years, 11 months ago

Things don't look good on this one. I'll admit when I saw the flashy new building going up, my first thought was "For a business to go from a small building with a small parking lot to such a ostentatious project, they are either getting thorax-deep in debt or they've stockpiled a massive pile of cash." I didn't think they stockpiled a massive pile of cash.

And when I saw the shakey site (it's great that you can search for a restaurant in virtually any city in the country- as long as that restaurant is one of several in Lawrence, KS), I had to grimace. It started to be clear that these guys probably didn't have their business fundamentals down pat.

laurennoel33 6 years, 9 months ago

I know this for a fact.He never took a business class in his life.period.

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