Stellantis Financial Services vs. Sky Auto Mall, Iowa Dealership Defaults in $12.3 Million Floorplan Fraud Lawsuit

This article covers an active and rapidly developing case. Information reflects court records and verified reporting as of May 9, 2026. This page will be updated as proceedings continue.

Stellantis Financial Services vs. Sky Auto Mall is a civil lawsuit in which Stellantis alleges Sky Auto Mall and its owners engaged in a “$12.3 million sophisticated and intentional” fraud by taking out loans from multiple lenders for the same vehicles, failing to repay those loans, and keeping two sets of financial records to hide the scheme. A Linn County judge has since defaulted the owners after they failed to respond to the lawsuit, and Cedar Rapids Bank and Trust has now filed foreclosure on Sky Auto Mall’s mortgaged property.

Quick Facts

Field	Detail
Plaintiff	Stellantis Financial Services (Texas-based lending arm of Stellantis)
Defendants	Sky Auto Mall LLC; Sky Chevrolet LLC; Alex Tovstanovsky (Buffalo Grove, IL); Igor Tovstanovsky (Naperville, IL); Yelena Tovstanovsky (Naperville, IL)
Case Type	Breach of contract; breach of guaranty; business fraud — floorplan financing
Court	Linn County District Court, Iowa (6th Judicial District)
Date Filed	March 5, 2026 (Stellantis); March 2, 2026 (Ford Credit)
Case Number	TBD — exact docket number not confirmed in public records as of May 9, 2026
Amount Claimed	$12,300,000 plus interest, fees, and punitive damages — Stellantis suit alone
Total Exposure (Both Suits)	Approximately $18,000,000 across Stellantis and Ford Credit lawsuits combined
Proceeds Retained	According to the complaint, Sky retained approximately $1,400,000 in vehicle sale proceeds owed to Stellantis
Current Stage	Default entered against owners; bankruptcy filed (Chapter 11, N.D. Ill.); vehicles seized; property foreclosure filed by Cedar Rapids Bank and Trust
Judge	6th Judicial District Judge Valerie Clay (Benton County proceedings)
Bankruptcy Court	U.S. Bankruptcy Court, Northern District of Illinois (filed March 20, 2026)
Plaintiff Attorney	TBD — counsel of record not confirmed by name in verified sources as of May 9, 2026
Last Updated	May 9, 2026

Case Timeline

Date	Event
November 7, 2023	Stellantis and Sky Auto Mall enter floorplan loan agreement
March 2, 2026	Ford Credit files lawsuit against Sky Auto Mall and owners
March 5, 2026	Stellantis Financial Services files lawsuit in Linn County District Court
March 10, 2026	Linn County judge denies immediate vehicle seizure; sets March 20 hearing
March 11, 2026	Sky Auto Mall and Sky Chevrolet issue WARN notices — 76 employees laid off
March 20, 2026	Judge grants writ of replevin — Stellantis authorized to seize vehicles; owners declared bankruptcy
March 20, 2026	Alex, Igor, and Yelena Tovstanovsky file Chapter 11 bankruptcy, U.S. Bankruptcy Court, N.D. Illinois
March 26, 2026	Linn County Sheriff’s Office begins seizing vehicles from Center Point and Newhall lots
May 8, 2026	Linn County judge enters default against owners for failing to respond to the lawsuit
May 8, 2026	Cedar Rapids Bank and Trust files foreclosure on Sky Auto Mall’s mortgaged property

Sky Auto Mall, the Tovstanovsky Family, and the Alleged Fraud

Sky Auto Mall operated two locations in eastern Iowa — one at 1001 Ford Lane in Center Point and one in Newhall. The dealership was owned and operated by the Tovstanovsky family: Igor, Yelena, and Alex Tovstanovsky, who described themselves on the dealership’s website as first-generation immigrants who started their dealership business in 2007 and expanded into Iowa by purchasing the Center Point location in 2021, adding Newhall in 2025.

The business sold vehicles under Stellantis brands — Chrysler, Jeep, and Fiat — as well as Ford and Chevrolet through its related Sky Chevrolet location. Stellantis made a floorplan loan agreement with Sky Auto on November 7, 2023, for purchasing new and used cars for inventory. Floorplan financing is a standard dealership lending arrangement — a lender provides funds to buy vehicles for a dealer’s lot, and the dealer repays those loans as each vehicle sells. According to the lawsuit, Stellantis claims the Tovstanovsky family arranged to take out duplicate loans on the same vehicles by simultaneously submitting financing requests to both Stellantis and Ford Motor Credit Company, then transferring vehicles between locations to hide the double loans from each lender.

The lawsuit asserts Sky Auto carried out the scheme by maintaining two sets of accounting records — one that reflected the reality of the fraud and one that showed a distorted picture for Stellantis’s records. Sky also sold vehicles and kept the proceeds rather than repaying Stellantis, retaining approximately $1,400,000 that the lawsuit claims belongs to Stellantis. This practice — obtaining multiple loans on the same collateral without disclosing the arrangement to lenders — is referred to in the auto finance industry as “double flooring” or being “out of trust.” It is a form of fraud against lenders because each lender believes it holds a first-priority security interest in the vehicle, when in reality two or more lenders hold competing claims on the same asset.

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The Default, the Bankruptcy, and the Foreclosure

The Tovstanovsky owners did not appear at hearings, could not be served, and did not file a legal response to the lawsuit. At the March 20 hearing, no one from Sky Auto appeared and lawyers for Stellantis said the three owners had declared bankruptcy. A court default means the defendants failed to respond to a lawsuit within the required time. When a default is entered, the court accepts the plaintiff’s factual allegations as true and moves toward entering a judgment in the plaintiff’s favor without a trial.

Alex, Igor, and Yelena Tovstanovsky filed Chapter 11 bankruptcy petitions in the U.S. Bankruptcy Court for the Northern District of Illinois on March 20, 2026. Chapter 11 is a form of bankruptcy that allows a business or individual to reorganize debts rather than liquidate immediately — it also triggers an automatic stay, which temporarily halts most collection actions against the debtor. However, because Stellantis had already obtained a writ of replevin in state court before the bankruptcy filing, the vehicle seizure was able to proceed.

Cedar Rapids Bank and Trust is now filing foreclosure on Sky Auto Mall’s mortgaged property — meaning the real estate on which the dealership operated is also at risk of being seized and sold. A foreclosure is the legal process by which a lender takes possession of a property when the borrower fails to make mortgage payments. This adds a second layer of financial reckoning on top of the Stellantis and Ford Credit lawsuits, as the physical buildings that housed the dealership now also face court-ordered sale to satisfy debts.

Since the lawsuit was filed, Sky Auto Mall closed both its Center Point and Newhall locations and laid off 76 employees. Some employees told reporters they learned they had lost their jobs from watching the news.

What Sky Auto Mall Customers Are Facing

The collapse of Sky Auto Mall left customers in an uncertain position. Customers who purchased vehicles from Sky Auto Mall — including those who paid extra for dealership incentives such as lifetime free oil changes and powertrain warranties — are now concerned those benefits may not be honored, since the dealership has closed and its owners have filed for bankruptcy.

A default judgment in the Stellantis case does not directly resolve customer warranty or service contract claims. Those claims would likely need to be pursued through the bankruptcy proceedings in the Northern District of Illinois, where creditors — including customers — can file proofs of claim. Customers who financed vehicles through Sky Auto Mall should confirm their loan was processed correctly and that no unauthorized liens were placed on their vehicle title. The Iowa Attorney General’s Consumer Protection Division is a resource for Iowa residents who believe they were harmed by the dealership’s conduct.

Frequently Asked Questions

Who filed the lawsuit against Sky Auto Mall?

 Stellantis Financial Services filed a lawsuit in Linn County District Court on March 5, 2026, against Sky Auto Mall LLC, Sky Chevrolet LLC, and owners Alex, Igor, and Yelena Tovstanovsky, alleging breach of contract, breach of guaranty, and fraud totaling more than $12,300,000. Ford Credit filed a separate lawsuit on March 2, 2026, involving related claims.

What court is handling this case? 

The Stellantis civil lawsuit is filed in Linn County District Court, Iowa (6th Judicial District). The owners’ bankruptcy is in the U.S. Bankruptcy Court for the Northern District of Illinois, filed March 20, 2026.

What is the current status of the Sky Auto Mall lawsuit?

 A Linn County judge has entered a default against the owners for failing to respond to the lawsuit. Vehicles were seized from the dealership lots in March 2026, and Cedar Rapids Bank and Trust has filed foreclosure on the dealership’s mortgaged property.

What is “double flooring” and why is it fraud?

 Double flooring is when a dealer takes out loans from two different lenders against the same vehicle inventory without telling either lender. Each lender believes it holds the only secured claim on those vehicles. When the dealer then sells the cars and keeps the money instead of repaying either lender, the losses can reach millions of dollars.

How much money does Stellantis claim Sky Auto Mall owes? 

Stellantis is demanding repayment of the full $12,300,000 principal, not including interest and fees. A separate filing sought seizure of vehicles, parts, and equipment that could exceed $20,000,000 in value. Stellantis also seeks punitive damages.

What happened to Sky Auto Mall’s employees? 

Sky Auto Mall in Center Point laid off 46 workers and Sky Chevrolet in Newhall laid off 30 workers shortly after the lawsuit was filed — a total of 76 employees — according to notices posted on Iowa’s Worker Adjustment and Retraining Notification (WARN) website.

Can I read the court documents? 

The Stellantis civil lawsuit is on file in Linn County District Court, Iowa. Iowa court records are publicly searchable through the Iowa Judicial Branch at iowacourts.gov. Bankruptcy filings for the Tovstanovsky owners are available through PACER in the Northern District of Illinois.

What should Sky Auto Mall customers do now? 

Customers with active service contracts or warranties should contact the Iowa Attorney General’s Consumer Protection Division. Customers who believe they were misled about vehicle pricing or financing should document all communications with the dealership and consult a licensed Iowa consumer protection attorney.

Sources

• KCRG — Sky Auto Mall Defaults in Stellantis Case, Bank Files to Seize Property, May 8, 2026
• The Gazette — Center Point Car Dealership Accused of Loan Fraud, March 2026
• The Gazette — $12.3 Million in Car Inventory to Be Seized from Sky Auto, March 2026

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Information is based on publicly available court records and verified news reporting. Allegations described in this article have not been proven in court. For advice regarding a particular legal situation, consult a qualified attorney.

Prepared by the AllAboutLawyer.com Editorial Team and reviewed for factual accuracy against verified court records and public sources on May 9, 2026. Last Updated: May 9, 2026.