A Massachusetts judge is allowing most of a lawsuit involving a string of car dealerships in southern Maine to move forward.

The Superior Court judge dismissed a couple of counts in the lawsuit filed by David Rosenberg, who in 2017 sold most of his stake in Prime Motors to New York-based investment firm GPB Capital Holdings for $235 million. Rosenberg was named chief executive of the expanded company, renamed Prime Automotive Group, which is based in Massachusetts and owns 40 dealerships in the Northeast. But Rosenberg soon complained about financial misdeeds he said he uncovered and exercised an option that allowed him to sell the rest of his stock to the company.

The company fired Rosenberg, and when it failed to make a payment on Rosenberg’s shares, he filed suit in Massachusetts.

The defendants wanted a judge to dismiss the lawsuit, but Justice William Sullivan set aside only a few counts in the lawsuit and is allowing most of it to move forward.

For instance, the eight defendants asked Sullivan to dismiss the suit against them as individuals, arguing that they did not conduct business in the commonwealth, despite the company’s being based in Massachusetts. But the judge dismissed only a part of the suit against one of the defendants.

Sullivan also dismissed some separate charges against individual defendants on another count and threw out a fraud allegation, but allowed most of the suit against the corporate executives or board members and the company itself to move forward.


A statement issued by a spokeswoman for GPB Capital noted that two previous efforts by Rosenberg to get injunctions failed, and that the company said it believed it would ultimately prevail on the remaining counts.

Prime Automotive or entities connected with its parent company, GPB Capital, also face lawsuits filed by a Texas law firm, which alleges the company defrauded investors of $1.8 billion, and the Commonwealth of Massachusetts, which said 180 investors in the state have lost $14 million.

Those suits echo many of Rosenberg’s allegations. He said the parent firm promised to pay investors from profits, but instead used money from new investors to pay those who had put in money before. In that way, he said, it operated like an illegal Ponzi scheme.

He also said GPB Capital executives created fake contracts and adopted deals that benefited the heads of the investment fund rather than investors. And, Rosenberg said, in 2018 an accounting firm hired to audit the investment firm’s books resigned and said it was withdrawing its opinions that had given the firm a clean bill of financial health for 2015 and 2016.

A string of Prime dealerships in Saco and Scarborough was launched in 2004 by Ira Rosenberg, who had created and then sold the Ira Motor Group string of dealerships in Massachusetts. Ira and David Rosenberg began operating the Maine dealerships together a few years later. Ira Rosenberg retired in 2017 and died in 2019.

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