LMP Automotive Holdings Inc. has lost a more than $2 million deposit after its deal to buy an 85 percent stake in 10 franchised dealerships in Florida was terminated last month.
The publicly traded Fort Lauderdale, Fla., company, in a Wednesday regulatory filing, said dealer Alan Wildstein "was entitled to retain earnest money deposits" totaling $2,000,500 because asset purchase agreements were terminated Feb. 16.
Wildstein declined to comment.
It marks the second seven-figure deposit the group has forfeited in recent months amid acquisition deals falling through. In that deal, LMP lost a $1.5 million deposit after its plan to buy five import dealerships in Texas from Steve McGavock was terminated Jan. 31.
Last month, LMP said it planned to cancel its pending dealership acquisitions because it was unable to obtain financing to pay for them. At least one other of LMP's seven pending deals has been terminated, for Chantz Scott Chrysler-Dodge-Jeep-Ram in Greeneville, Tenn.
In that deal, LMP had paid a $250,000 deposit, which Chantz Scott, CEO of Chantz Scott Auto Group, told Automotive News he believes he's entitled to. Scott, in an email Thursday, said he hasn't received the deposit. In a Feb. 17 regulatory filing announcing the canceled deal, LMP said it "did not incur any material termination penalties pursuant to such termination."
LMP also announced in a Feb. 18 regulatory filing that its proposed acquisition of property in Elmsford, N.Y., for $29 million was terminated and that the company also "did not incur any material termination penalties pursuant to such termination."
LMP, with eight franchised dealerships and four used-vehicle stores, also said last month it was exploring strategic options including a possible sale of the company.
LMP shares were down 3 percent to $4.20 when the market closed Thursday.
In September, LMP said it planned to buy the majority stake in Alan Jay Automotive Network, of Sebring, Fla. It planned to pay $50 million for the dealerships' goodwill and about $44.1 million for real estate. That transaction also was to include a used-car center and a fleet operations outlet.