A once-prospering dealership group facing lawsuits by two captive finance arms over allegations of selling nearly 500 vehicles but not repaying floorplan loans has lost franchises at two of its dealerships in Pennsylvania, while two Michigan dealerships have closed.
Former NFL linebackers Antonio Pierce and Jessie Armstead and auto industry veteran Michael Saporito own the dealerships. In August, Nissan Motor Acceptance Corp. and Hyundai Capital America each sued the dealership group over claims it sold hundreds of vehicles but failed to repay millions of dollars in floorplan loans on the vehicles as dictated in lending agreements. That's known in the industry as being out of trust. The dealership group has denied the lawsuits' allegations.
Nissan North America Inc. has terminated its sales-and-service franchise agreement for Hazleton Nissan, a Hazle Township, Pa., store, and confirmed Wednesday that All Pro Nissan of Dearborn and All Pro Nissan of Macomb, two dealerships in Michigan, closed in the last week. Less than three years ago, the Michigan dealerships and their ownership trio had been touted by Nissan as part of a plan to grow market share in metro Detroit.
"Nissan is working to identify candidates to fill these locations," a Nissan spokeswoman said in an email to Automotive News.
Kia Motors America also confirmed in an email to Automotive News that in early October, it terminated the Hazleton Kia franchise in Hazle Township for failing to conduct normal business operations.
It is not clear whether Hyundai Motor America also terminated its franchise with the dealership group for Hazleton Hyundai, also in Hazle Township, though the store is no longer listed on Hyundai's website. A Hyundai spokesman declined to comment.
The Nissan captive's lawsuit covers allegations at the Hazleton Nissan store and the two All Pro Nissan stores in Michigan. Hyundai Capital America's lawsuit covers allegations at the Hyundai and Kia stores in Pennsylvania.
The Hazleton Nissan, Hyundai and Kia stores are located in an auto mall along with a Honda store owned by the dealership group, which remains open. The new dealerships opened in 2016, according to Armstead's website.
The Hazleton Nissan franchise termination happened in the last few weeks, and the store until recently had been operating with a limited staff. A former employee of one of the Hazleton dealerships said crews were seen at the Nissan store last week removing Nissan signs from the building.
The dealership group is seeking to sell the two Nissan stores in Michigan, according to court records. Those stores until recently had been operating some services with a skeleton crew. All Pro Nissan of Dearborn opened in 2015, decorated with memorabilia from Armstead's and Pierce's football careers, while All Pro Nissan of Macomb opened in 2017.
Messages were left seeking comment with lawyers representing the dealership group and Saporito. The ownership trio also own a Honda store and Cadillac dealership in New Jersey. Two of the owners, Armstead and Saporito, also are trying to open a new point Honda dealership in Grapevine, Texas.
Nissan Motor Acceptance Corp. is seeking to gain possession of some vehicles held by the dealership group. Court hearings on two motions are scheduled for Nov. 20 in Luzerne County Court of Common Pleas in Pennsylvania and in Macomb County Circuit Court in Michigan.
In September, Hyundai Capital America also filed a lawsuit in Luzerne County to start foreclosure proceedings on the Hazleton Hyundai and Hazleton Kia facilities.