In December, Automotive News reported that Volkswagen, Toyota, Subaru and Audi were troubled by GPB's ouster of Rosenberg as Prime's CEO and as dealer principal of most Prime dealerships without notice or approval. Some automakers said contract breaches allegedly made by GPB were grounds for franchise termination.
Rosenberg's lawyers argue that pending automaker terminations, likely divestments of the Toyota stores, plus economic fallout from the coronavirus pandemic jeopardize Prime's business.
"Absent court intervention, Toyota's divestment both poses a grave existential threat to the business and very likely ensures that plaintiffs will never be able to recover the $24-plus million," the May 8 filing said.
But GPB and Prime argue that the retailer is financially strong.
Sterling said Prime's business has substantially grown since Rosenberg was fired. Used-vehicle sales volume rose 15 percent, parts-and-service gross profit increased 10 percent and overall net profits soared during the first two and a half months of 2020, before the coronavirus crisis hit, she said.
"We believe that [the new motion] has even less of a chance of success," Sterling said.
Prime and GPB also dispute that automakers have been unwilling to work with them. Sterling said Todd Skelton, a former AutoNation executive who became Prime's CEO in January, has been approved as dealer principal by 13 light-vehicle brands — notably not Toyota, VW or Audi — and for a majority of Prime's stores.
A Toyota spokesman and an executive with Subaru of New England, the distributor for Subaru in six states, declined to comment but both confirmed all stores remain open.
Audi, in a Feb. 5 letter, notified GPB and Prime that it would terminate the retailer's dealer agreement and franchise relationship for Audi Westwood in 60 days. Audi's letter, provided in Rosenberg's May 8 affidavit, cited multiple breaches such as unauthorized ownership and management changes.
The status of that termination is unclear; Audi Westwood has continued to operate under Prime's management. An Audi spokeswoman declined to comment.
In April, GPB and individual defendants in the Rosenberg case asked the court to dismiss the complaint. GPB also filed a motion to force arbitration and stay the proceedings.
Rosenberg's lawyers say he was fired in retaliation for reporting to authorities alleged financial wrongdoings by GPB. GPB has said Rosenberg was fired because of misconduct, failure to cooperate with the board and refusal to cooperate with audits.