Forklift distributor Toyota Material Handling USA Inc (TMHU) formed a relationship on September 4 with a newly-created Memphis-based dealer.

In August, industry luminary Thomas J Clark III established the new corporation, Mid-South Lift Trucks Inc (MLTI), to serve the needs of TMHU in the region. Arrangements with funding sources were nearing completion, and MLTI expected to be operational within days, sources said.

As dealer principal, Mr Clark located the new dealership on four sites already occupied by the Lilly Co, of which he is president.

In early August, TMHU reached an understanding with Lilly that it would be an agent for service and delivery of Toyota equipment. That arrangement was structured at a level below a dealer relationship.

Lilly had represented distributor Yale Materials Handling Corp (YMHC) and, tenuously, continues that relationship. Yale's parent, the materials handling group of Nacco Industries Inc, is fighting the Toyota-Lilly link.

YMHC, of Greenville, North Carolina, has said it seeks to retain representation through the Lilly dealership and has filed a lawsuit against Toyota and Lilly in US District Court in Memphis (Forkliftaction.com News #121).

Ronald Roensch, general counsel with TMHU, in Irvine, California, said Lilly was unable to finance Toyota equipment, based on Lilly's pre-existing financial covenants with Yale.

Mr Clark established MLTI as a totally separate corporation "to eliminate secured creditor squabbles", Mr Roensch said. The new relationship allowed MLTI to finance the purchase of Toyota equipment, he said.

MLTI and Lilly are both based in Memphis and now share branch locations in Jackson, Tennessee, and Jackson and Tupelo, Mississippi. A possible additional MLTI site is the Lilly branch in Jonesboro, Arkansas.

In January, TMHU decided to drop the dealership services of CTK Inc, of Memphis, Mr Roensch said. CTK entities still represented TMHU in portions of western Tennessee, northern Mississippi and north-eastern Arkansas until August 1, when TMHU terminated the dealer relationship.

Subsequently, on August 19, a grand jury indicted CTK's controlling shareholder, Bernard Panchikal, for false insurance claims (Forkliftaction.com News #123).

Forkliftaction.com News's US correspondent Roger Renstrom this week analyses the Mid-South's forklift market. Click here to read more.