Primary Automotive Group’s the vast majority operator GPB Funds Holdings agreed to pay back New England vendor and previous Primary CEO David Rosenberg $30 million to settle a lawsuit filed by Rosenberg in 2019, in accordance to a Monday regulatory filing.
The settlement arrives inside times of GPB’s prepared sale of Prime dealerships to Team 1 Automotive Inc.
In July 2019, Rosenberg and Rosenberg loved ones trusts submitted a lawsuit in Massachusetts Exceptional Courtroom against GPB, alleging GPB failed to shell out them following they exercised an alternative in April 2019 to provide their stake in the dealership group. The go well with also alleged that GPB, an different-asset management business, was retaliating versus Rosenberg for the reason that he was hoping to address alleged fraudulent action at GPB.
Rosenberg in his grievance explained he had exercised a “put alternative” to offer the family’s stake in Prime for a overall of $23.6 million, to be compensated in 4 payments of $5.9 million each and every. The to start with payment was past owing at the time of the lawsuit’s submitting, according to the grievance. Rosenberg also was seeking curiosity.
GPB fired Rosenberg in September 2019, citing motives of alleged misconduct, failure to cooperate with the board and refusal to cooperate with audits. In November of that 12 months, Rosenberg and the Rosenberg trusts amended the lawsuit, including defendants and new allegations of monetary misconduct.
GPB and Rosenberg this thirty day period “agreed to a entire and final settlement of the pending litigation and arbitration of $30 million,” in accordance to GPB Automotive Portfolio constrained partnership’s 3rd-quarter report submitted with the U.S. Securities and Trade Commission. GPB Automotive Portfolio is a holding firm that owns all but one particular of Prime’s dealerships.
“Upon entire execution of the settlement, the get-togethers filed a joint stipulation, dismissing with prejudice the pending litigation in Massachusetts and withdrawing from” arbitration, the SEC filing stated.
Other phrases of the arrangement were not disclosed.
A stipulation hadn’t nevertheless been submitted in the case, according to on the internet court documents, which display the case continues to be open up. A GPB spokesman in a assertion to Automotive News reiterated that GPB agreed to settle the claims and lawsuit with Rosenberg.
Rosenberg referred Automotive Information to his attorney.
“Mr. Rosenberg is delighted to set this dispute behind him so that he can place his strength back into the motor vehicle business relatively than into the litigation company,” Benjamin Wish, a Boston law firm with the Todd & Weld law organization, mentioned in a assertion to Automotive Information.
The settlement was claimed just extra than a 7 days prior to Group 1 Automotive Inc.’s prepared acquisition of 30 Prime Automotive dealerships for $880 million. The offer is slated to close by Nov. 26, Team 1 has claimed in regulatory filings.
GPB is embroiled in many lawsuits and this calendar year was accused by the SEC of functioning a Ponzi-like scheme. GPB’s previous CEO David Gentile and two many others connected with GPB have been indicted in February on expenses on conspiracy to dedicate securities fraud, conspiracy to commit wire fraud and securities fraud. Gentile also was billed with wire fraud.
A federal check was appointed to oversee GPB Money and dealership operations as element of the SEC situation, filed in February. That observe has accepted the sale of the dealerships to Team 1, in accordance to Monday’s SEC submitting.
Key Automotive of Westwood, Mass., ranks No. 18 on Automotive Information‘ record of the best 150 dealership teams dependent in the U.S., with retail gross sales of 31,529 new autos in 2020.
