At a private meeting in August 2018, the then-CEO of KAR Global's key-manufacturing company asked employees whether they should "save" the business or "burn it down," according to a federal lawsuit filed by the key company. KAR said Jay Wiener, who was fired in April, chose the latter route.
KAR's High Tech Locksmiths and Automotive Key Controls, which Wiener founded, have sued Wiener and four other former employees, as well as a company called Steelers Keys, for breach of contract, trade violations and computer fraud.
The litigation shines some light on why KAR reported more than $5 million in losses at HTL, an ADESA subsidiary, in the second quarter.
The lawsuit, filed in the Southern District of Indiana, claims Wiener undermined his own companies from within, sowed discord with employees and recruited them for competing ventures — all after a falling out with KAR executives, including KAR Remarketing Services President David Vignes, to whom Wiener reported.
In a motion to dismiss the case, Wiener argued that the plaintiffs failed to state a valid cause of action, that the Indiana court was an improper venue and that the plaintiffs were "shotgun pleading." He filed a countersuit Sept. 17 against Vignes, KAR and its subsidiaries in U.S. District Court in Miami. That lawsuit, which alleges Vignes "began destroying and dismantling everything that Mr. Wiener had built over the years" and that Vignes had personal issues with Wiener, seeks declaratory relief from KAR's lawsuit and a jury trial.
"Their claims are meritless," KAR said in a statement regarding the countersuit.
As of last week, both cases were active, with KAR Global seeking to have them consolidated to Indiana and Wiener's team looking to do the same in Florida.
KAR has declined to comment in detail on the original lawsuit because it is ongoing.
"We stand by the allegations in our complaint and intend to pursue them vigorously," the company said in an emailed statement.