The estranged father-son relationship between Larry Crain Sr. and Chris Crain has escalated into a lawsuit on track for an expected trial date later this year.
In essence, the complaint by Chris Crain, 49, seeks emancipation from business dealings with his 79-year-old father, the CEO of Crain Automotive Holdings and related family enterprises.
The case in Pulaski County Circuit Court underscores the sometimes fractious nature of family dynamics in business and the generational tension that can accompany transitioning corporate power.
The 50-page complaint wades into a lengthy list of grievances against Crain Sr. that include allegations of self-dealing in the administration of family trusts, buyout of family assets at below fair market value dictated by him, forging Chris Crain’s signature on corporate documents and more.
“There’s no merit to what him and his lawyers are saying in the lawsuit,” Crain Sr. said in a telephone interview last week. “It’s heartbreaking. In 2017, he left the business without any notice. Chris didn’t want me telling him what to do. He didn’t like working for Larry Crain Sr.”
According to the complaint, the same alleged controlling-domineering behavior that drove Chris Crain away caused an earlier schism between the father and another son.
“Until his departure in 2012, the success of the Crain Companies was due in part to the leadership of Larry Crain Jr., who served as president of Crain Automotive Holdings.
“Crain Sr. sought to control and dominate Crain Jr. and continually threatened economic sanctions if Crain Jr. did not succumb to his ever-increasing demands.
“In late 2012, Crain Sr.’s tyrannical behavior created an untenable environment to such an extent that Crain Jr. left the business and was bought out of Crain Automotive Holdings.”
“I’m not going to make any comments about that,” Larry Crain Jr. said when asked if his brother’s account was accurate.
Crain Sr. denied that’s how his namesake’s exodus from the family business went down. In his answer to the complaint, the elder Crain said Larry Crain Jr. later wanted to return to the family business, but he was not willing to agree to the terms his son sought.
Unlike his brother, Chris Crain was unable to negotiate a buyout of his interest in the family’s business.
Sixteen years ago, Chris Crain oversaw all of the Crain dealerships north of the Arkansas River, and his brother oversaw the dealerships south of the river.
“Dad oversees all of us,” Chris Crain said back in 2005.
On numerous occasions, Crain Sr. referred to himself as the “king” and as the “dictator“ of all things going on in the Crain Cos. and regularly used his positions of control to punish those who did not submit to his demands, according to Chris Crain’s lawsuit.
“Even though the statements ‘king’ and ‘dictator’ were said in jest, from a legal and personal responsibility, Larry Crain Sr. is in control of several companies,” the elder Crain responded in answer to the complaint. “The statements have nothing to do with his responsibilities nor the operation and management of the companies.”
Conway Dealership
The lawsuit also seeks to shed fatherly entanglements from Chris Crain’s Hyundai dealership in Conway.
“I bought that dealership to get him a job, to get him back in the business,” Crain Sr. told Arkansas Business. “I effectively loaned him the money to buy the dealership.”
According to court filings, the purchase of the dealership was accomplished through Chris Crain selling part of his 17.25% interest in Crain Automotive Holdings for $3.5 million.
Although Chris Crain owns the Hyundai dealership through his Crain H of Conway LLC, the deal was structured with strings that didn’t give him full operational autonomy from Crain Automotive Holdings.
On March 3, Chris Crain launched additional legal action in Faulkner County through Crain H of Conway.
The eviction lawsuit sought to force several of his father’s ventures to stop doing business out of the body shop at the Crain Hyundai of Conway dealership and leave the property at 1003 N. Museum Road.
The named defendants were Crain Automotive Holdings LLC, Crain Investments Ltd. and Crain Buick GMC LLC, all led by Larry Crain Sr.
Through his venture, the younger Crain paid $260,000 for the improvements and assets associated with the body shop and agreed to lease the property back to his father’s entities.
In turn, the Crain Sr. ventures were to pay monthly rent of $2,000 “for a period not to exceed two years,” which expired last year on June 29.
The 24-month time frame was supposed to be used to develop a body shop elsewhere in Conway for the three Crain entities to replace the leased Hyundai quarters, but that didn’t happen.
The unlawful detainer case was filed after two notification letters to vacate the property were sent on July 10 and Feb. 12.
Faulkner County Circuit Judge Susan Weaver signed an order on April 22 that moved the lawsuit toward a final resolution.
The Crain Sr. defendants agreed to vacate the property by June 30 and leave the body shop in broom-clean condition or face treble damages.
Back in the Pulaski County lawsuit, Judge Herbert Wright on April 8 found Larry Crain Sr. in contempt and assessed a $200-per-day fine. The fine was dated from Feb. 16 when Crain was first ordered to respond to his son’s discovery request and interrogatories by March 5.
An 11th-hour request for more time to respond on March 4 was denied, and the March 5 deadline came and went, resulting in a second contempt hearing on April 8.
Larry Crain Sr. posted a $11,800 fine in the court registry on April 15, a deadline set to respond or have his answer to the complaint struck from the record.
Crain Sr.’s veracity was called into question during the weeks leading up to the contempt of court ruling.
“The defendants have twice been ordered to answer these discovery requests and still fail to do so,” Pat James of Little Rock, a Crain Jr. attorney, noted on March 8. “I would add that Larry Crain Sr.’s alleged eye problems were not severe enough to keep him from driving or having breakfast Saturday morning at Main Street Cafe in Searcy. He could have assisted in answering discovery and simply chose not to.”
Through his lawyers, Chris Crain has requested a jury trial, which is expected to run two weeks.
