Citing a “default” on payments, GE Commercial Distribution Finance (GECDF) is seeking a restraining order against Mega RV Corp., an entity doing business as McMahon’s RV and now dissolved finance arm MCMRV Inc.

Per documents initially filed April 4 by GECDF in the Central California U.S. District Court, the high-profile dealership – one of a short list of retailers to survive the deep recession in Southern California – has an “out-of-trust” balance of just over $3.56 million.

The alleged “breach” stems from the closure of its outlet in Mesa, Ariz., and the subsequent distribution and sale of inventory at other McMahon’s RV sites. GECDF claims the inventory’s value to be more than $28 million, for which it has not been compensated. The company also expressed concern that McMahon’s would continue to sell off inventory.

GECDF claims McMahon’s actions violate an Inventory Financing Agreement enacted in May of 2006 stating that the finance company is entitled to possession of all collateral. GECDF also claims that McMahon’s failed to acknowledge correspondence in February on two occasions informing McMahon’s the company was in default of payments due.

A court date is set for May 7 to determine “why the court should not grant GECDF a preliminary injunction” prohibiting McMahon’s from  “further disposing of GECDF’s collateral.”