This Popular Auto Repair Chain Just Filed For Bankruptcy And We Don't Know Exactly Why

It's a tough time to be in the automotive industry in America, especially with the Trump tariffs making cars more expensive thanks to a 25% tariff on imported automobiles and auto parts. This is certain to send operating costs through the roof for automobile manufacturers and repair shops across the U.S. However, there were already a number of businesses in this industry that were struggling long before any tariffs went into effect.

For example, three companies that sell different kinds of automotive parts — Wheel Pros, Northvolt AB, and Accuride Corp –  all filed for Chapter 11 in 2024. And as of April 2025, a franchisee of popular auto repair chain, AAMCO, also joined the ranks of auto industry companies filing for Chapter 11 bankruptcy. While the reason behind their bankruptcy filing is also rather uncertain, by taking a deeper look at certain court documents on the matter, it may be possible to get a better understanding.

AAMCO Transmissions and Total Car Care was founded in Philadelphia in 1957 by a man named Anthony A. Martino. While initially starting as a small business, the company first got the idea to begin franchising after seeing fast food chains like McDonald's beginning to do the same. In 1963, AAMCO's first franchising efforts succeeded by opening a new location in New Jersey. Since then, its business has spread, leading the company to boast that its served 45 million customers.

However, not all of these franchisees have been able to achieve the same success as their parent company. This was especially true for Cincinnati based AAMCO franchisee, Trinity Automotive Services LLC. According to court documents, this franchisee is in a sufficient amount of debt. Despite listing up to $50,000 in assets, the company also listed between $100,000 to $500,000 in liabilities. It's also worth noting that in addition to owing creditors extensive amounts of money, the franchisee also has disputed claims with both the IRS and the Ohio Department of Taxation.

For starters, the three most common types of bankruptcy cases are Chapter 7, Chapter 11, and Chapter 13. According to the IRS, Chapter 11 is primarily used for incorporated businesses, and by individuals with debts in excess of the Chapter 13 limit. Now although there is typically a negative connotation associated with filing for bankruptcy, there are some reasons why bankruptcy may actually work in your favor. For example, businesses that are struggling financially — and have accumulated too much debt to see a way out – can file for Chapter 11 as a way to essentially hit the restart button.

Filing for Chapter 11 allows businesses to stay operational while attempting to pay off their debts under court supervision. Typically, to file for Chapter 11, a business has more than $2,750,000 in combined total debt. It is often referred to as reorganization, because it serves as a pathway for businesses to negotiate a plan to reorganize finances and restructure debts in order to avoid closure. However, it is worth noting that not all businesses that file for Chapter 11 are able to successfully come roaring back from bankruptcy. Overall, Chapter 11 should be viewed as an absolute last resort for businesses struggling financially and looking for relief, as it can negatively impact things like credit score and reputation.