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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: 12pt; 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: 12pt; 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></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"><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: 12pt; 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: 12pt; FONT-FAMILY: Times New Roman"><strong>CURRENT
      REPORT</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"><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></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"><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: June 7, 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></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="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="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="justify" valign="top" width="30%" style="border-bottom: black thin solid;">
              <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">Delaware</font></div>
            </td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%" style="border-bottom: black thin solid;">
              <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">000-24669</font></div>
            </td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%" style="border-bottom: black thin solid;">
              <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">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">06-1501703</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="30%">
              <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">(State
                or other jurisdiction </font></div>
            </td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%">
              <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">(Commission
                File Number)</font></div>
            </td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%">
              <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">(IRS
                Employer</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="30%">
              <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">of
                incorporation)</font></div>
            </td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%">
              <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">&#160;&#160;&#160;&#160;&#160;&#160;
                Identification No.)</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="30%">&#160;</td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%">&#160;</td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="30%">&#160;</td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%">&#160;</td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="30%" style="border-bottom: black thin solid;">
              <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">1309
                South Main Street, Waterbury, CT</font></div>
            </td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%">&#160;</td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%" style="border-bottom: black thin solid;">
              <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">06706</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="30%">
              <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">(Address
                of principal executive offices)</font></div>
            </td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="30%">
              <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">(Zip
                Code)</font></div>
            </td>
          </tr>

      </table>
    </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="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="FONT-FAMILY: Wingdings">o</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">o</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">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-FAMILY: Wingdings" size="2">o</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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">o</font>
      Pre-commencement communications pursuant
      to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></div><br>
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        </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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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
      1 - Registrant&#8217;s Business and Operations </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
      1.01 - Entry into a Material Definitive Agreement.</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: 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">As
      described in Section 8 of this Form 8-K, on June 7, 2006 the Registrant through
      its counsel entered into and filed with the Court of Chancery of the State
      of
      Delaware a Stipulation and Agreement of Compromise, Settlement and Release
      (the
&#8220;Settlement Agreement&#8221;) providing for the settlement of the complaint filed on
      June 30, 2005 in the Court of Chancery of the State of Delaware by Steven N.
      Bronson, Louis J. Mead and Leonard Hagan against Hometown Auto Retailers, Inc.
      and its directors, Corey E. Shaker, William C. Muller, Jr., Joseph Shaker,
      Bernard J. Dzinski, Jr., Steven A. Fournier, H. Dennis Lauzon and Timothy C.
      Moynahan. Pursuant to the terms of the Settlement Agreement, the holders of
      2,740,727 shares of Class A Common Stock and of options to acquire up to 242,500
      shares of Class A Common Stock (which are currently outstanding and not held
      by
      members of the Shaker family or the Muller family) will receive either
      $2.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">40
      in
      cash or the excess, if any, of $2.40 per share over the exercise price per
      share
      of the options, reduced, however, by whatever fees and expenses are awarded
      to
      plaintiffs&#8217; counsel by the Court. Plaintiffs&#8217; counsel intend to apply for an
      allowance of fees and expenses in the amount of $300,000 and defendants have
      agreed not to oppose such application. Any attorneys&#8217; fees and expenses awarded
      by the Court shall be deducted from the $2.40 per share price and assuming
      that
      there are no changes in the outstanding options and assuming the full amount
      of
      fees and expenses is awarded, the per share price to be used to determine the
      amount to be paid to the holders of the shares and options shall be
      $2.29944.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; 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">One
      of
      the conditions of the settlement is that the Registrant must obtain sufficient
      funding to be able to make the foregoing cash payments. In order to obtain
      the
      required funding, the Registrant intends to borrow $9,500,000 from a financial
      institution. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; 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">Pursuant
      to the terms of the proposed settlement agreement, a newly-formed corporation
      will be merged with and into the Registrant. Following the merger, each share
      of
      Class A common stock that is held by a shareholder of the Registrant who is
      not
      a member of the Shaker family or the Muller family will be cancelled in exchange
      for a cash payment equal to $2.40 (reduced by a pro rata portion of any
      attorneys fees and expenses awarded by the Court of Chancery in connection
      with
      the litigation). In addition, each option to acquire a share of Class A common
      stock that is held by a shareholder of the Registrant who is not a member of
      the
      Shaker family or the Muller family will be cancelled in exchange for a cash
      payment equal to the excess of $2.40 (reduced by a pro rata portion of any
      attorneys fees and expenses awarded by the Court of Chancery in connection
      with
      the litigation) over the exercise price of the option. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">It
      is
      then anticipated that the Exchange Agreement as originally announced in the
      Registrant&#8217;s Form 8-K filed on June 2, 2005 will be completed simultaneously
      with the merger. The Settlement Agreement is subject to a number of conditions,
      including (i) the ability of the Registrant to obtain sufficient financing
      to
      consummate the Merger, (ii) receipt of a tax-free exchange opinion with respect
      to the Exchange Agreement, (iii) satisfaction or waiver of the conditions in
      the
      Exchange Agreement, (iv) satisfaction or waiver of the conditions in the Merger
      Agreement, (v) approval and consummation of the merger, (vi) the ability of
      the
      Registrant to obtain Final Court Approval as defined in the Settlement
      Agreement, and (vii) exercise of appraisal rights in the merger by the holders
      of less than 7% of the shares of Class A common stock. </font></div><br>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">-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: 72pt; 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 style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Section
      8 - Other Events</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: 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
      8.01 - Other Events.</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: 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">On
      June
      7, 2006 the Registrant through its counsel entered into and filed with the
      Court
      of Chancery of the State of Delaware a Stipulation and Agreement of Compromise,
      Settlement and Release providing for the settlement of the complaint filed
      on
      June 30, 2005 in the Court of Chancery of the State of Delaware by Steven N.
      Bronson, Louis J. Mead and Leonard Hagan against Hometown Auto Retailers, Inc.
      and its directors, Corey E. Shaker, William C. Muller, Jr., Joseph Shaker,
      Bernard J. Dzinski, Jr., Steven A. Fournier, H. Dennis Lauzon and Timothy C.
      Moynahan. Pursuant to the terms of the settlement, the holders of 2,740,727
      shares of Class A Common Stock and of options to acquire up to 242,500 shares
      of
      Class A Common Stock (which are currently outstanding and not held by members
      of
      the Shaker family or the Muller family) will receive either $2.40 in cash or
      the
      excess, if any, of $2.40 per share over the exercise price per share of the
      options, reduced, however, by whatever fees and expenses are awarded to
      plaintiffs&#8217; counsel by the Court. Plaintiffs&#8217; counsel intend to apply for an
      allowance of fees and expenses in the amount of $300,000 and defendants have
      agreed not to oppose such application. Any attorneys&#8217; fees and expenses awarded
      by the Court shall be deducted from the $2.40 per share price and assuming
      that
      there are no changes in the outstanding options and assuming the full amount
      of
      fees and expenses is awarded, the per share price to be used to determine the
      amount to be paid to the holders of the shares and options shall be
      $2.29944.</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: 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">The
      settlement of the litigation will include a release of claims against the
      defendants and a dismissal of all claims with prejudice. The proposed settlement
      agreement does not constitute an admission of liability or wrongdoing by any
      party.</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: 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">The
      settlement is subject to various conditions, including approval by the Court
      of
      Chancery of the State of Delaware. The Court of Chancery will consider whether
      or not to approve the proposed settlement terms at a hearing, the date of which
      is still to be determined. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div><br>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
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        </div>
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      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">-3-</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
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      <div id="HDR">
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    <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="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: 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">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>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></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>
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            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">HOMETOWN
              AUTO
              RETAILERS, INC.</font></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>
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          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Date:&#160;<u>June
              7, 2006</u></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: ">/s/&#160;Corey
              Shaker</font></td>
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            <td align="left">
              <hr style="COLOR: black" align="left" noshade size="2" width="80%"><font size="2">Corey
              Shaker, President and Chief</font></td>
          </tr>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Executive
              Officer</font></td>
          </tr>

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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": "06892014"}, "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: June 7, 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
(Commission
                File Number)
(IRS
                Employer
of
                incorporation)
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)
o
Written
      communications pursuant to
      Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule
      14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
      Act
      (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant
      to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Section
      1 - Registrant's Business and Operations
Item
      1.01 - Entry into a Material Definitive Agreement.
As
      described in Section 8 of this Form 8-K, on June 7, 2006 the Registrant through
      its counsel entered into and filed with the Court of Chancery of the State
      of
      Delaware a Stipulation and Agreement of Compromise, Settlement and Release
      (the
"Settlement Agreement") providing for the settlement of the complaint filed on
      June 30, 2005 in the Court of Chancery of the State of Delaware by Steven N.
      Bronson, Louis J. Mead and Leonard Hagan against Hometown Auto Retailers, Inc.
      and its directors, Corey E. Shaker, William C. Muller, Jr., Joseph Shaker,
      Bernard J. Dzinski, Jr., Steven A. Fournier, H. Dennis Lauzon and Timothy C.
      Moynahan. Pursuant to the terms of the Settlement Agreement, the holders of
      2,740,727 shares of Class A Common Stock and of options to acquire up to 242,500
      shares of Class A Common Stock (which are currently outstanding and not held
      by
      members of the Shaker family or the Muller family) will receive either
      $2.
40
      in
      cash or the excess, if any, of $2.40 per share over the exercise price per
      share
      of the options, reduced, however, by whatever fees and expenses are awarded
      to
      plaintiffs' counsel by the Court. Plaintiffs' counsel intend to apply for an
      allowance of fees and expenses in the amount of $300,000 and defendants have
      agreed not to oppose such application. Any attorneys' fees and expenses awarded
      by the Court shall be deducted from the $2.40 per share price and assuming
      that
      there are no changes in the outstanding options and assuming the full amount
      of
      fees and expenses is awarded, the per share price to be used to determine the
      amount to be paid to the holders of the shares and options shall be
      $2.29944.
One
      of
      the conditions of the settlement is that the Registrant must obtain sufficient
      funding to be able to make the foregoing cash payments. In order to obtain
      the
      required funding, the Registrant intends to borrow $9,500,000 from a financial
      institution.
Pursuant
      to the terms of the proposed settlement agreement, a newly-formed corporation
      will be merged with and into the Registrant. Following the merger, each share
      of
      Class A common stock that is held by a shareholder of the Registrant who is
      not
      a member of the Shaker family or the Muller family will be cancelled in exchange
      for a cash payment equal to $2.40 (reduced by a pro rata portion of any
      attorneys fees and expenses awarded by the Court of Chancery in connection
      with
      the litigation). In addition, each option to acquire a share of Class A common
      stock that is held by a shareholder of the Registrant who is not a member of
      the
      Shaker family or the Muller family will be cancelled in exchange for a cash
      payment equal to the excess of $2.40 (reduced by a pro rata portion of any
      attorneys fees and expenses awarded by the Court of Chancery in connection
      with
      the litigation) over the exercise price of the option.
It
      is
      then anticipated that the Exchange Agreement as originally announced in the
      Registrant's Form 8-K filed on June 2, 2005 will be completed simultaneously
      with the merger. The Settlement Agreement is subject to a number of conditions,
      including (i) the ability of the Registrant to obtain sufficient financing
      to
      consummate the Merger, (ii) receipt of a tax-free exchange opinion with respect
      to the Exchange Agreement, (iii) satisfaction or waiver of the conditions in
      the
      Exchange Agreement, (iv) satisfaction or waiver of the conditions in the Merger
      Agreement, (v) approval and consummation of the merger, (vi) the ability of
      the
      Registrant to obtain Final Court Approval as defined in the Settlement
      Agreement, and (vii) exercise of appraisal rights in the merger by the holders
      of less than 7% of the shares of Class A common stock.
-2-
Section
      8 - Other Events
Item
      8.01 - Other Events.
On
      June
      7, 2006 the Registrant through its counsel entered into and filed with the
      Court
      of Chancery of the State of Delaware a Stipulation and Agreement of Compromise,
      Settlement and Release providing for the settlement of the complaint filed
      on
      June 30, 2005 in the Court of Chancery of the State of Delaware by Steven N.
      Bronson, Louis J. Mead and Leonard Hagan against Hometown Auto Retailers, Inc.
      and its directors, Corey E. Shaker, William C. Muller, Jr., Joseph Shaker,
      Bernard J. Dzinski, Jr., Steven A. Fournier, H. Dennis Lauzon and Timothy C.
      Moynahan. Pursuant to the terms of the settlement, the holders of 2,740,727
      shares of Class A Common Stock and of options to acquire up to 242,500 shares
      of
      Class A Common Stock (which are currently outstanding and not held by members
      of
      the Shaker family or the Muller family) will receive either $2.40 in cash or
      the
      excess, if any, of $2.40 per share over the exercise price per share of the
      options, reduced, however, by whatever fees and expenses are awarded to
      plaintiffs' counsel by the Court. Plaintiffs' counsel intend to apply for an
      allowance of fees and expenses in the amount of $300,000 and defendants have
      agreed not to oppose such application. Any attorneys' fees and expenses awarded
      by the Court shall be deducted from the $2.40 per share price and assuming
      that
      there are no changes in the outstanding options and assuming the full amount
      of
      fees and expenses is awarded, the per share price to be used to determine the
      amount to be paid to the holders of the shares and options shall be
      $2.29944.
The
      settlement of the litigation will include a release of claims against the
      defendants and a dismissal of all claims with prejudice. The proposed settlement
      agreement does not constitute an admission of liability or wrongdoing by any
      party.
The
      settlement is subject to various conditions, including approval by the Court
      of
      Chancery of the State of Delaware. The Court of Chancery will consider whether
      or not to approve the proposed settlement terms at a hearing, the date of which
      is still to be determined.
-3-
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:
June
              7, 2006
By:
/s/ Corey
              Shaker
Corey
              Shaker, President and Chief
Executive
              Officer
-4-