Crain Investments LP has filed a lawsuit against Ford Motor Co. and Everett Ford Inc., alleging that the automobile manufacturer and franchise unlawfully torpedoed a deal and cost Crain Investments $13.5 million in the process.
One year ago, Crain Family Holdings LLC and its affiliate, Auto Dealership Partners, signed an agreement with Penske Automotive Group Inc. to buy Landers Ford at 19501 Interstate 30 in Benton and Landers Chrysler Dodge Jeep Ram at 7800 Alcoa Road in Benton.
They ended up purchasing the Landers CDJR dealership in February. That same month, however, Everett acquired Landers Ford. Ford had exercised its “right of first refusal” and assigned that right to Everett.
But how is Crain Investments involved?
Crain Investments owns the 7.5-acre Landers Ford property and agreed to lease it plus an adjoining 4.3 acres — about 15 acres total — to the would-be buyers of both dealerships.
Crain Family Holdings and Auto Dealership Partners intended to relocate Landers CDJR next to Landers Ford. Obviously, that didn’t happen.
The $13.5 million is what Crain Investments expected to make from rent over a 10-year period.
It alleges that the buyers met all criteria for Ford to approve the sale and were also misled. According to the complaint, they were told final approval was on the way and Ford’s representatives gave no indication that there was an objection to the deal.
In addition, the Arkansas Motor Vehicle Commission agreed with Crain Family Holdings and Auto Dealership Partners that Ford violated the Arkansas Motor Vehicle Commission Act when it exercised its right of first refusal, assigned that right to Everett and transferred Landers Ford to Everett.
The suit said that Ford has denied this but was ordered to pay a $5,000 civil penalty on Sept. 3. When contacted for comment, the company said, “We typically do not comment on pending litigation.”
Crain Investments’ complaint accuses Ford and Everett of violating the state Motor Vehicle Commission Act, fraud, conspiracy, tortious interference with a contract and tortious interference with business expectations.
It is asking for punitive damages, a jury trial and for judgments against both Ford and Everett. Everett did not respond to a request for comment by presstime.