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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>UNITED
      STATES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      AND EXCHANGE COMMISSION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Washington,
      D.C. 20549</font><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FORM
      8-K</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CURRENT
      REPORT</strong></font><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to Section 13 or 15(d) of the </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
      Exchange Act of 1934</font><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Date
      of Report: February 9, 2006</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Date
      of
      earliest event reported)</font><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Hometown
      Auto Retailers, Inc.</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
      name of Registrant as specified in its charter)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <div align="center">
        <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%">

            <tr bgcolor="white">
              <td width="33%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<u><font size="2">Delaware</font></u></div>
              </td>
              <td width="33%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<u><font size="2">000-24669</font></u></div>
              </td>
              <td width="33%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<u><font size="2">06-1501703</font></u></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td width="33%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<font size="2">(State
                  or other jurisdiction of
                  incorporation)</font></div>
              </td>
              <td width="33%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Commission
                  File Number)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
              </td>
              <td width="33%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<font size="2">(IRS
                  Employer Identification
                  No.)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td width="33%">&#160;</td>
              <td width="33%">&#160;</td>
              <td width="33%">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td width="33%">&#160;</td>
              <td width="33%">&#160;</td>
              <td width="33%">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td width="33%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<u><font size="2">1309
                  South Main Street, Waterbury,
                  CT</font></u></div>
              </td>
              <td width="33%">&#160;</td>
              <td width="33%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<u><font size="2">06706</font></u></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td width="33%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<font size="2">(Address
                  of principal executive
                  offices)</font></div>
              </td>
              <td width="33%">&#160;</td>
              <td width="33%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Zip
                  Code)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td width="33%">&#160;</td>
              <td width="33%">&#160;</td>
              <td width="33%">&#160;</td>
            </tr>

        </table>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>(203)
      756-1300</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Registrant's
      telephone number, including area code)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">______________________________________________</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Former
      name or former address, if changed since last report.)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (see General Instruction A.2)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">r</font>&#160;Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Wingdings">r</font>
      Soliciting material pursuant to Rule
      14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Wingdings">r</font>
      Pre-commencement communications pursuant
      to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Wingdings">r</font>
      Pre-commencement communications pursuant
      to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Section
      2 - Financial Information </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      2.01 - Completion of Acquisition or Disposition of Assets.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      February 9, 2006 the Registrant completed the acquisition of a Nissan franchise
      as originally announced in the Registrant&#8217;s Form 8-K filed on December 8, 2005.
      Pursuant to the terms of the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Asset
      and
      Franchise Purchase Agreement (the &#8220;Agreement&#8221;) with Nissan of Natick, Inc., a
      Massachusetts corporation with an office and principal place of business at
      671
      Worcester Road, Natick, Massachusetts 01760 (the &#8220;Seller&#8221;), the Registrant
      purchased the Seller&#8217;s Nissan sales and service franchise and certain of
      Seller&#8217;s assets including the Seller&#8217;s customer lists, certain new Nissan parts
      and accessories, Nissan special tools and Nissan new vehicle inventory (the
      &#8220;Nissan Assets&#8221;). The Registrant did not assume any liabilities of the Seller.
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      purchase </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">price
      was
      $2,000,000 plus $25,000 for certain Nissan special tools, and $118,000 for
      Nissan parts and accessories. In addition, the Registrant received a credit
      for
      holdbacks, floor plan assistance and advertising credits of $56,000 and assumed
      the Nissan new vehicle inventory on hand which was financed under Registrant&#8217;s
      existing floor plan financing with Ford Motor Credit Corporation. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      June
      2, 2005 the Registrant filed a Form 8-K in which it announced an Exchange
      Agreement (the &#8220;Exchange Agreement&#8221;) with the New England Subsidiaries of the
      Registrant (as described in the Form 8-K) and the stockholders of the Registrant
      in the Shaker Group (as described in the Form 8-K). On July 8, 2005 the
      Registrant filed a Form 8-K in which it announced that it had been notified
      that
      three shareholders had commenced a purported individual, class and derivative
      action in the Court of Chancery of the State of Delaware, seeking to enjoin
      the
      consummation of the exchanges that were announced on June 2, 2005. In the Form
      8-K filed on July 8, 2005, the Registrant stated that it was unable to predict
      when it will send the information statement concerning the proposed exchanges
      to
      its shareholders or when the proposed exchanges will be consummated. In light
      of
      the continuing potential adverse effects which the ongoing litigation has upon
      the Registrant, it continues to be unable to predict when it will send the
      information statement concerning the proposed exchanges to its shareholders
      or
      when the proposed exchanges will be consummated. However, the assets acquired
      under the Agreement were acquired by Hometown Auto Framingham, Inc., one of
      the
      New England Subsidiaries and all of the indebtedness relating to the acquisition
      is secured only by the assets of the New England Subsidiaries. Accordingly,
      in
      the event that the exchanges are ultimately consummated, it is anticipated
      that
      the assets and the indebtedness related thereto will become the sole obligation
      of the New England Subsidiaries and the Registrant will have no interest in
      the
      assets and no obligation with respect to the indebtedness incurred in connection
      with the acquisition of such assets.</font></div>
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          2 -</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      2.03 - Creation of a Direct Financial Obligation or an Obligation under an
      Off-Balance Sheet Arrangement of a Registrant.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      order
      to fund the acquisition of the assets described in Item 2.01 of this Form 8-K,
      the Registrant completed several simultaneous financing transactions on February
      9, 2006 involving: (i) the pay-off of existing financing originally obtained
      by
      the Registrant&#8217;s wholly owned subsidiary, Bay State Realty Holdings, Inc.,
      through Falcon Financial, LLC (the &#8220;Falcon Financing&#8221;); (ii) a mortgage loan in
      favor of Bay State Realty Holdings, Inc. in the original principal amount of
      $6,035,000 from Ford Motor Credit Company (the &#8220;Mortgage Loan&#8221;); and (iii) a
      capital loan in favor of the Registrant&#8217;s wholly owned subsidiary, Hometown Auto
      Framingham, Inc., in the original principal amount of $1,500,000 from Ford
      Motor
      Credit Company (the &#8220;Capital Loan&#8221;).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Falcon Financing was originally obtained as of April 16, 1999 and was in the
      original principal amount of $5,800,000 bearing interest at fixed rate of 10.0%
      per annum and payable in monthly installments of principal and interest over
      a
      fifteen (15) year term. Pursuant to the terms of the documents, the prepayment
      of the Falcon Financing required payment of a &#8220;yield maintenance&#8221; fee defined
      generally as the &#8220;excess, if any, of the value of all remaining payments,
      discounted to the prepayment date, over the outstanding Loan Amount.&#8221; As of the
      pay-off, the outstanding balance of principal and interest owed under the Falcon
      Financing was $4,301,927 and the yield maintenance fee was calculated to equal
      $1,003,440 for a total pay-off figure of $5,305,367. The yield maintenance
      fee
      will be expensed in the Registrant&#8217;s Consolidated Statement of Operations in the
      first quarter of 2006. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Mortgage Loan is in the original principal amount of $6,035,000, bears interest
      at a rate, variable monthly, equal to 2.75% per annum above the LIBOR Rate
      (which as of the closing on the Mortgage Loan resulted in an effective rate
      of
      7.24%), and is payable in 59 unequal, consecutive monthly installments of
      principal commencing on the first day of the second month following the closing,
      together with accrued interest, based upon a 240 month amortization, with a
      final balloon payment due upon maturity five (5) years from the first payment
      date. The Mortgage Loan was made to Bay State Realty Holdings, Inc. (the
&#8220;Borrower&#8221;) by Ford Motor Credit Company (the &#8220;Lender&#8221;) and is unconditionally
      guaranteed by the following corporate subsidiaries of the Registrant
      (collectively, the &#8220;Corporate Guarantors&#8221;): Hometown Auto Framingham, Inc.,
      Family Ford, Inc., Shakers, Inc., Hometown Brattleboro, Inc., Shaker Auto Group,
      Inc., and by the following individuals: Corey Shaker, Joseph Shaker, Steven
      Shaker, Janet Shaker, and Edward Shaker (the &#8220;Individual Guarantors&#8221;). The
      Registrant has agreed to indemnify the Individual Guarantors in the event that
      the Exchange Agreement is not consummated. The Mortgage Loan is secured by
      a
      first mortgage on real estate and improvements owned by the Borrower at 571
      Worcester Road, Framingham, Massachusetts (the &#8220;Property&#8221;), a first security
      interest in the Borrower&#8217;s and each Corporate Guarantor&#8217;s personal property, a
      collateral assignment of a lease by and between the Borrower and Hometown Auto
      Framingham, Inc., and a collateral assignment of all leases of real or personal
      property used in connection with the Property. Furthermore, the Mortgage Loan
      is
&#8220;cross-defaulted&#8221; and &#8220;cross-collateralized&#8221; with: (i) the Capital Loan from
      Lender to Hometown Auto Framingham, Inc. recited below; (ii) a Wholesale Line
      of
      Credit made by Lender to Hometown Auto Framingham, Inc. dated March 2, 2001;
      (iii) a Wholesale Line of Credit made by Lender to Family Ford, Inc. dated
      February 28, 2001; (iv) a Wholesale Line of Credit made by Lender to Shakers
      Inc. dated February 28, 2001; (v) a Wholesale Line of Credit made by Lender
      to
      Hometown Brattleboro, Inc. dated March 2, 1001; (vi) any and all other loans
      now
      or hereafter outstanding made by Lender to Borrower and/or the Guarantors;
      and
      (vii) any and all extensions, increases, amendments, renewals and modifications
      of the foregoing obligations.</font></div>
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          3 -</font></div>
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      <div id="HDR">
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    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Capital Loan is in the original principal amount of $1,500,000, bears interest
      at a variable rate, equal to 2.50% per annum above the Prime Rate (which as
      of
      the closing on the Capital Loan resulted in an effective rate of 10.0%), and
      is
      payable in 59 consecutive monthly installments of principal in the amount of
      $12,500 each commencing on the fifteenth day of the first month following the
      closing, together with accrued interest, with a final balloon payment due upon
      maturity five (5) years from the closing date. The Capital Loan was made to
      Hometown Auto Framingham, Inc. (the &#8220;Borrower&#8221;) by the Lender and is
      unconditionally guaranteed by the following corporate subsidiaries of the
      Registrant (collectively, the &#8220;Corporate Guarantors&#8221;): Bay State Realty
      Holdings, Inc., Family Ford, Inc., Shakers, Inc., Hometown Brattleboro, Inc.,
      Shaker Auto Group, Inc., and by the following individuals: Corey Shaker, Joseph
      Shaker, Steven Shaker, Janet Shaker, and Edward Shaker. The Capital Loan is
      secured by a first security interest in the Borrower&#8217;s and each Corporate
      Guarantor&#8217;s personal property, and is also &#8220;cross-defaulted&#8221; and
&#8220;cross-collateralized&#8221; with: (i) the Mortgage Loan from Lender to Bay State
      Realty Holdings, Inc. recited above; (ii) a Wholesale Line of Credit made by
      Lender to Hometown Auto Framingham, Inc. dated March 2, 2001; (iii) a Wholesale
      Line of Credit made by Lender to Family Ford, Inc. dated February 28, 2001;
      (iv)
      a Wholesale Line of Credit made by Lender to Shakers Inc. dated February 28,
      2001; (v) a Wholesale Line of Credit made by Lender to Hometown Brattleboro,
      Inc. dated March 2, 1001; (vi) any and all other loans now or hereafter
      outstanding made by Lender to Borrower and/or the Guarantors; and (vii) any
      and
      all extensions, increases, amendments, renewals and modifications of the
      foregoing obligations.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -36pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Both
      the
      Mortgage Loan and the Capital Loan were made with Lender&#8217;s understanding that
      the Borrowers and the Guarantors would not be prohibited from completing the
      pending Exchange Agreement disclosed in the Registrant&#8217;s June 2, 2005 Form 8-K
      filing. The Borrowers and Corporate Guarantors under the Mortgage Loan and
      the
      Capital Loan comprise the New England Subsidiaries (as described in the June
      2,
      2005 Form 8-K), and the Registrant is neither a Borrower nor a Guarantor under
      either Loan. Accordingly, in the event that the exchanges under the Exchange
      Agreement are ultimately consummated, it is anticipated that the indebtedness
      under the Mortgage Loan and the Capital Loan will remain the sole obligation
      of
      the New England Subsidiaries and the Registrant will have no obligation with
      respect to the indebtedness under the Mortgage Loan and the Capital
      Loan.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SIGNATURES</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this report to be signed on its behalf by the undersigned, hereunto
      duly authorized. </font></div>
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            <tr valign="top" bgcolor="#ffffff">
              <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
              <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
              <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
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              <td colspan="2">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HOMETOWN
                  AUTO RETAILERS, INC.</font></div>
              </td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Date:
                <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>February
                15, 2006</u></font></font></td>
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:&#160;&#160;</font></td>
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: "><u>/s/
                Corey
                Shaker&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
                </u><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt" size="3">&#160;</font></font></td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
              <td colspan="2"><font style="FONT-FAMILY: " size="1">&#160;</font></td>
              <td align="left"><font size="2">Corey Shaker, President and Chief
                Executive
                Officer</font></td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
              <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
              <td>&#160;</td>
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{"company-data": {"conformed-name": "HOMETOWN AUTO RETAILERS INC", "cik": "0001061117", "assigned-sic": "5500", "irs-number": "061501703", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-24669", "film-number": "06622366"}, "business-address": {"street1": "774 STRAITS TURNPIKE", "city": "WATERTOWN", "state": "CT", "zip": "06795", "phone": "8609454900"}}
Unassociated Document
UNITED
      STATES
SECURITIES
      AND EXCHANGE COMMISSION
Washington,
      D.C. 20549
FORM
      8-K
CURRENT
      REPORT
Pursuant
      to Section 13 or 15(d) of the
Securities
      Exchange Act of 1934
Date
      of Report: February 9, 2006
(Date
      of
      earliest event reported)
Hometown
      Auto Retailers, Inc.
(Exact
      name of Registrant as specified in its charter)
Delaware
000-24669
06-1501703
(State
                  or other jurisdiction of
                  incorporation)
(Commission
                  File Number)
(IRS
                  Employer Identification
                  No.)
1309
                  South Main Street, Waterbury,
                  CT
06706
(Address
                  of principal executive
                  offices)
(Zip
                  Code)
(203)
      756-1300
(Registrant's
      telephone number, including area code)
______________________________________________
(Former
      name or former address, if changed since last report.)
Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (see General Instruction A.2)
r
Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)
r
Soliciting material pursuant to Rule
      14a-12 under the Exchange Act (17 CFR 240.14a-12)
r
Pre-commencement communications pursuant
      to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
r
Pre-commencement communications pursuant
      to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Section
      2 - Financial Information
Item
      2.01 - Completion of Acquisition or Disposition of Assets.
On
      February 9, 2006 the Registrant completed the acquisition of a Nissan franchise
      as originally announced in the Registrant's Form 8-K filed on December 8, 2005.
      Pursuant to the terms of the
Asset
      and
      Franchise Purchase Agreement (the "Agreement") with Nissan of Natick, Inc., a
      Massachusetts corporation with an office and principal place of business at
      671
      Worcester Road, Natick, Massachusetts 01760 (the "Seller"), the Registrant
      purchased the Seller's Nissan sales and service franchise and certain of
      Seller's assets including the Seller's customer lists, certain new Nissan parts
      and accessories, Nissan special tools and Nissan new vehicle inventory (the
      "Nissan Assets"). The Registrant did not assume any liabilities of the Seller.
The
      purchase
price
      was
      $2,000,000 plus $25,000 for certain Nissan special tools, and $118,000 for
      Nissan parts and accessories. In addition, the Registrant received a credit
      for
      holdbacks, floor plan assistance and advertising credits of $56,000 and assumed
      the Nissan new vehicle inventory on hand which was financed under Registrant's
      existing floor plan financing with Ford Motor Credit Corporation.
On
      June
      2, 2005 the Registrant filed a Form 8-K in which it announced an Exchange
      Agreement (the "Exchange Agreement") with the New England Subsidiaries of the
      Registrant (as described in the Form 8-K) and the stockholders of the Registrant
      in the Shaker Group (as described in the Form 8-K). On July 8, 2005 the
      Registrant filed a Form 8-K in which it announced that it had been notified
      that
      three shareholders had commenced a purported individual, class and derivative
      action in the Court of Chancery of the State of Delaware, seeking to enjoin
      the
      consummation of the exchanges that were announced on June 2, 2005. In the Form
      8-K filed on July 8, 2005, the Registrant stated that it was unable to predict
      when it will send the information statement concerning the proposed exchanges
      to
      its shareholders or when the proposed exchanges will be consummated. In light
      of
      the continuing potential adverse effects which the ongoing litigation has upon
      the Registrant, it continues to be unable to predict when it will send the
      information statement concerning the proposed exchanges to its shareholders
      or
      when the proposed exchanges will be consummated. However, the assets acquired
      under the Agreement were acquired by Hometown Auto Framingham, Inc., one of
      the
      New England Subsidiaries and all of the indebtedness relating to the acquisition
      is secured only by the assets of the New England Subsidiaries. Accordingly,
      in
      the event that the exchanges are ultimately consummated, it is anticipated
      that
      the assets and the indebtedness related thereto will become the sole obligation
      of the New England Subsidiaries and the Registrant will have no interest in
      the
      assets and no obligation with respect to the indebtedness incurred in connection
      with the acquisition of such assets.
-
          2 -
Item
      2.03 - Creation of a Direct Financial Obligation or an Obligation under an
      Off-Balance Sheet Arrangement of a Registrant.
In
      order
      to fund the acquisition of the assets described in Item 2.01 of this Form 8-K,
      the Registrant completed several simultaneous financing transactions on February
      9, 2006 involving: (i) the pay-off of existing financing originally obtained
      by
      the Registrant's wholly owned subsidiary, Bay State Realty Holdings, Inc.,
      through Falcon Financial, LLC (the "Falcon Financing"); (ii) a mortgage loan in
      favor of Bay State Realty Holdings, Inc. in the original principal amount of
      $6,035,000 from Ford Motor Credit Company (the "Mortgage Loan"); and (iii) a
      capital loan in favor of the Registrant's wholly owned subsidiary, Hometown Auto
      Framingham, Inc., in the original principal amount of $1,500,000 from Ford
      Motor
      Credit Company (the "Capital Loan").
The
      Falcon Financing was originally obtained as of April 16, 1999 and was in the
      original principal amount of $5,800,000 bearing interest at fixed rate of 10.0%
      per annum and payable in monthly installments of principal and interest over
      a
      fifteen (15) year term. Pursuant to the terms of the documents, the prepayment
      of the Falcon Financing required payment of a "yield maintenance" fee defined
      generally as the "excess, if any, of the value of all remaining payments,
      discounted to the prepayment date, over the outstanding Loan Amount." As of the
      pay-off, the outstanding balance of principal and interest owed under the Falcon
      Financing was $4,301,927 and the yield maintenance fee was calculated to equal
      $1,003,440 for a total pay-off figure of $5,305,367. The yield maintenance
      fee
      will be expensed in the Registrant's Consolidated Statement of Operations in the
      first quarter of 2006.
The
      Mortgage Loan is in the original principal amount of $6,035,000, bears interest
      at a rate, variable monthly, equal to 2.75% per annum above the LIBOR Rate
      (which as of the closing on the Mortgage Loan resulted in an effective rate
      of
      7.24%), and is payable in 59 unequal, consecutive monthly installments of
      principal commencing on the first day of the second month following the closing,
      together with accrued interest, based upon a 240 month amortization, with a
      final balloon payment due upon maturity five (5) years from the first payment
      date. The Mortgage Loan was made to Bay State Realty Holdings, Inc. (the
"Borrower") by Ford Motor Credit Company (the "Lender") and is unconditionally
      guaranteed by the following corporate subsidiaries of the Registrant
      (collectively, the "Corporate Guarantors"): Hometown Auto Framingham, Inc.,
      Family Ford, Inc., Shakers, Inc., Hometown Brattleboro, Inc., Shaker Auto Group,
      Inc., and by the following individuals: Corey Shaker, Joseph Shaker, Steven
      Shaker, Janet Shaker, and Edward Shaker (the "Individual Guarantors"). The
      Registrant has agreed to indemnify the Individual Guarantors in the event that
      the Exchange Agreement is not consummated. The Mortgage Loan is secured by
      a
      first mortgage on real estate and improvements owned by the Borrower at 571
      Worcester Road, Framingham, Massachusetts (the "Property"), a first security
      interest in the Borrower's and each Corporate Guarantor's personal property, a
      collateral assignment of a lease by and between the Borrower and Hometown Auto
      Framingham, Inc., and a collateral assignment of all leases of real or personal
      property used in connection with the Property. Furthermore, the Mortgage Loan
      is
"cross-defaulted" and "cross-collateralized" with: (i) the Capital Loan from
      Lender to Hometown Auto Framingham, Inc. recited below; (ii) a Wholesale Line
      of
      Credit made by Lender to Hometown Auto Framingham, Inc. dated March 2, 2001;
      (iii) a Wholesale Line of Credit made by Lender to Family Ford, Inc. dated
      February 28, 2001; (iv) a Wholesale Line of Credit made by Lender to Shakers
      Inc. dated February 28, 2001; (v) a Wholesale Line of Credit made by Lender
      to
      Hometown Brattleboro, Inc. dated March 2, 1001; (vi) any and all other loans
      now
      or hereafter outstanding made by Lender to Borrower and/or the Guarantors;
      and
      (vii) any and all extensions, increases, amendments, renewals and modifications
      of the foregoing obligations.
-
          3 -
The
      Capital Loan is in the original principal amount of $1,500,000, bears interest
      at a variable rate, equal to 2.50% per annum above the Prime Rate (which as
      of
      the closing on the Capital Loan resulted in an effective rate of 10.0%), and
      is
      payable in 59 consecutive monthly installments of principal in the amount of
      $12,500 each commencing on the fifteenth day of the first month following the
      closing, together with accrued interest, with a final balloon payment due upon
      maturity five (5) years from the closing date. The Capital Loan was made to
      Hometown Auto Framingham, Inc. (the "Borrower") by the Lender and is
      unconditionally guaranteed by the following corporate subsidiaries of the
      Registrant (collectively, the "Corporate Guarantors"): Bay State Realty
      Holdings, Inc., Family Ford, Inc., Shakers, Inc., Hometown Brattleboro, Inc.,
      Shaker Auto Group, Inc., and by the following individuals: Corey Shaker, Joseph
      Shaker, Steven Shaker, Janet Shaker, and Edward Shaker. The Capital Loan is
      secured by a first security interest in the Borrower's and each Corporate
      Guarantor's personal property, and is also "cross-defaulted" and
"cross-collateralized" with: (i) the Mortgage Loan from Lender to Bay State
      Realty Holdings, Inc. recited above; (ii) a Wholesale Line of Credit made by
      Lender to Hometown Auto Framingham, Inc. dated March 2, 2001; (iii) a Wholesale
      Line of Credit made by Lender to Family Ford, Inc. dated February 28, 2001;
      (iv)
      a Wholesale Line of Credit made by Lender to Shakers Inc. dated February 28,
      2001; (v) a Wholesale Line of Credit made by Lender to Hometown Brattleboro,
      Inc. dated March 2, 1001; (vi) any and all other loans now or hereafter
      outstanding made by Lender to Borrower and/or the Guarantors; and (vii) any
      and
      all extensions, increases, amendments, renewals and modifications of the
      foregoing obligations.
Both
      the
      Mortgage Loan and the Capital Loan were made with Lender's understanding that
      the Borrowers and the Guarantors would not be prohibited from completing the
      pending Exchange Agreement disclosed in the Registrant's June 2, 2005 Form 8-K
      filing. The Borrowers and Corporate Guarantors under the Mortgage Loan and
      the
      Capital Loan comprise the New England Subsidiaries (as described in the June
      2,
      2005 Form 8-K), and the Registrant is neither a Borrower nor a Guarantor under
      either Loan. Accordingly, in the event that the exchanges under the Exchange
      Agreement are ultimately consummated, it is anticipated that the indebtedness
      under the Mortgage Loan and the Capital Loan will remain the sole obligation
      of
      the New England Subsidiaries and the Registrant will have no obligation with
      respect to the indebtedness under the Mortgage Loan and the Capital
      Loan.
-
          4 -
SIGNATURES
Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this report to be signed on its behalf by the undersigned, hereunto
      duly authorized.
HOMETOWN
                  AUTO RETAILERS, INC.
Date:
February
                15, 2006
By:
/s/
                Corey
                Shaker
Corey Shaker, President and Chief
                Executive
                Officer
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          5 -