Rosenberg initially sued GPB in July, alleging the company failed to make a $5.9 million payment to him out of retaliation as he tried to address fraudulent activity at GPB. The lawsuit claims Rosenberg exercised his option to sell his $23.6 million stake in Prime.
GPB began investing in dealerships in 2013. Prime Automotive formed in fall 2017, when Rosenberg's Prime Motor Group combined with GPB's Capstone Automotive Group. Rosenberg also was fired as CEO of Prime Motor Group, which had continued as a subsidiary of Prime Automotive.
GPB cited misconduct, failure to cooperate with the board and refusal to cooperate with the audits as reasons for terminating Rosenberg with cause, according to a letter signed by Westfall that was included in Rosenberg's amended complaint. Westfall wrote that Rosenberg had been making "derogatory statements" to automakers and lenders to "achieve your transparent objective to force a sale of the automotive business back to you and any financial backers you may have identified."
Rosenberg amended his lawsuit against GPB to include several additional allegations of fraudulent behavior by GPB, such as fabricating income and self-dealing transactions, according to the Nov. 26 complaint. It also named several new defendants such as Gentile and Westfall and other entities.
The lawsuit includes allegations of "massive, past, ongoing and material financial improprieties" by defendants dating to at least 2014 and claims that Rosenberg provided such information to GPB's auditor and the SEC and was retaliated against, including by being terminated.
Rosenberg, according to the lawsuit, this year recommended that GPB should launch a strategic sale of its dealerships to protect investors and assets and to prevent being forced into a "fire sale."
Rosenberg wants to be restored as dealer operator of the dealerships he led, plus seeks damages and attorneys' fees.
"We believe Mr. Rosenberg's allegations should be met with extreme skepticism," GPB said in a statement. "The company intends to vigorously defend against those allegations and fully anticipates that it will succeed on the merits."
GPB lawyer Tab Rosenfeld called Rosenberg a "disgruntled ex-employee who's trying to make trouble for the company." He said GPB denies the allegations made about the automotive business and wouldn't comment on what GPB is doing regarding the automaker notices.
Howard Cooper, a Boston lawyer for Rosenberg, declined to comment on the case, as did Rosenberg.