It has been quite a fall for Michael Kahn, the flamboyant former amateur boxer who ran the fastest-growing U.S. dealership group in 2007. Last week a Los Angeles jury ruled Kahn must pay $40 million to Nissan Motor Acceptance Corp. to settle a claim.
With five Nissan stores, two Toyota dealerships and a Chrysler franchise in Los Angeles and San Francisco, Kahn's Superior Automotive Group rocketed to 73rd on Automotive News' list of the top 125 dealership groups in 2007, up from 106th in 2006.
But Kahn's group collapsed in February 2009 after Nissan's finance arm alleged he was selling out of trust, the industry's term for a dealer's nonrepayment of borrowed funds. Nissan canceled financing and seized his inventories.
Nissan sued Kahn for $40 million. He countersued, alleging Nissan Motor Acceptance canceled his financing only after the parent company suffered losses in the economic crisis and went on a global push to stanch red ink.
Kahn alleged that, until then, Nissan had encouraged him to expand and flew him to Tokyo to receive an award. But Nissan's lawyers countered that winning an award did not mitigate Kahn's selling out of trust, and the jury agreed.