Fired Prime Motor Group founder sues to get back into company.

Byline: Kris Olson

A leading member of one of the first families of New England automobile dealerships is waging a court battle to get back into the company he founded after allegedly being fired for blowing the whistle on financial improprieties of the business's majority owner, whose legal woes extend far beyond Massachusetts.

With his lawsuit filed in Norfolk Superior Court on behalf of himself and his family trusts, David Rosenberg also hopes to halt the dismantling of everything he and his Prime Motor Group partners have built over the last decade.

Rosenberg, the son of local auto sales legend Ira, and his partners were not actively seeking to sell the business when they were approached in early 2017 by a broker representing GPB Capital, a New-York-based alternative asset management firm operating under a "private equity" structure.

GPB claimed to have funds investing in a wide range of businesses, from health care to waste management, but had begun to focus on soliciting investments in automobile dealerships several years earlier.

A separate lawsuit filed in November in Austin, Texas, now paints that operating model as a "garden variety Ponzi scheme," under which investors' 8 percent annual returns were paid not out of profits but by recruiting a fresh crop of investors.

But none of that was apparent to Rosenberg and his partners in the spring of 2017, when they were convinced to sell GPB a majority interest in the business.

As part of the deal, however, vehicle manufacturers insisted that Rosenberg continue to run the dealerships, given the premium the industry places on its relationships with dealer-operators who will not tarnish their brands, according to the amended complaint Rosenberg filed on Nov. 27.

Once Rosenberg was in the fold, GPB tapped him to oversee its other dealerships as well, which gave Rosenberg the necessary vantage point to discover GPB's "massive past, ongoing and material financial improprieties," according to the complaint.

Among the improprieties were allegedly fraudulent and back-dated "performance guarantees," an "unheard of" practice in the automotive business," according to the complaint.

Under those guarantees, a manager, Jeffrey Lash, allegedly agreed to cover personally any shortfalls in the promised net profits of two of GPB's Volkswagen dealerships. But the arrangement's problems went deeper, according to Rosenberg.

While financial statements indicated that Lash had paid $1.1 million into the...