Beleaguered Alternative Asset Firm Also Reaches $30M Settlement With Former Prime CEO
New York-based GPB Capital Holdings, LLC has finalized its sale of its Prime Automotive Group to Group 1 Automotive. The purchase includes all of Prime Auto’s assets, including over two dozen car dealerships and three collision centers.
The $880M sale of Prime Automotive Group was announced in September 2021. This comes months after a regulatory filing in May 2021 when GPB Capital stated that it doubted the former’s survival. In August 2021, the alternative asset firm spoke about selling dealerships to generate operational liquidity.
Also, according to GPB Automotive Portfolio LP’s Form 10-Q with the Securities and Exchange Commission (SEC), ex-Prime CEO David Rosenberg will receive a $30M settlement to conclude his lawsuit.
He accused the alternative asset firm of not paying him and his family’s established trusts after they sold their stake in the dealer group. He also claims that GPB Capital fired him as a retaliatory act after he accused the company of running a mass Ponzi scheme. GPB Auto is one of GPB Capital Holdings’ largest funds and has reported some of the biggest losses for investors.
Meanwhile, GPB Capital Holdings continues to deal with fraud allegations. Not only is it contending with an SEC lawsuit, but also there are other litigation and investigations accusing the company and key executives of defrauding over 17,000 investors in a more than $1.7B Ponzi scam. These executives are facing parallel criminal charges.
Additionally, dozens of broker-dealers who collectively earned over $160M in commissions are being brought to account through investor claims in FINRA arbitration. It is unknown whether GPB investments have any value left to them at all. GPB Capital has been under the supervision of an independent monitor for most of 2021.
Settlement With Rosenberg Concludes Lawsuit After GPB Capital Holdings Fired Him
Rosenberg sold most of his stake in Prime Motors to GPB for $235M in 2017. He was named CEO of the renamed Prime Automotive Group. Concerned about what he claims was proof of financial misconduct, Rosenberg sought to address these matters and he sold his remaining stock in the firm. The company fired him in 2019.
In the ex-Prime CEO’s lawsuit, he contended that he used a “put option” to sell the family’s stake in the company for $23.6M in four payments of $5.9M. He claims that the first payment had not been issued by the time he filed his complaint and, also, he wanted to receive interest.
Seasoned Securities Fraud Law Firm
Our experienced GPB private placement investment attorneys are representing a number of these investors in FINRA arbitration claims to pursue damages from their brokers and brokerage firms who were negligent and breached their fiduciary duty by prioritizing commissions over their customers’ best interests.
Contact Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) today if you invested in any of the following GPB funds:
- GPB Holdings
- GPB Holdings Qualified
- GPB Holdings II
- GPB Holdings III
- GPB Automotive Portfolio
- GPB Cold Storage
- GPB NYC Development
- Armada Waste Management
- GPB Waste Management
- GPB Eurobond Finance
Call our experienced GPB investment fraud attorneys at (800) 259-9010 so that we can help you explore your legal options in a free consultation.