Auto dealer David Rosenberg will receive $30 million as part of a settlement of his legal claims against GPB Capital Holdings, the New York investment firm that acquired Prime Motor Group from Rosenberg and his father four years ago.
The settlement paved the way for Westwood-based Prime, a group with nearly 30 dealerships and three collision centers, to be sold again — this time to Fortune 500 car retailer Group 1 Automotive, based in Houston. The sale, initially reported in September for $880 million, was completed last week.
David Rosenberg and his father, Ira, sold a majority interest in Prime, one of the largest dealership groups in New England, to GPB in 2017. The younger Rosenberg stayed on as chief executive and minority shareholder. By 2019, the partnership turned sour, as Rosenberg began raising concerns about financial irregularities that he uncovered, including examples of money being used by some investors to finance payments to others. He reported his findings to the Securities and Exchange Commission, and also spelled them out in a lawsuit he filed against GPB in June of 2019. GPB fired him in September, and publicly chalked up Rosenberg’s beef to a contractual dispute.
However, state and federal regulators raised similar concerns, that GPB investors had been wronged in a Ponzi-like scheme, and pursued their own investigations and litigation over the matter. The state government actions have been put on hold pending a related criminal case; in February, the US Attorney’s office for the Eastern District of New York indicted three executives affiliated with GPB, including the now-former CEO, David Gentile, alleging securities fraud against all three. The SEC filed a similar civil action at that time. Gentile stepped down as a result, and GPB is now being overseen by a court-appointed monitor.
Rosenberg, meanwhile, has since started assembling a new dealership group, for now focused on northern New England. He owns six dealerships so far, and runs them out of the Canobie Lake Toyota in Salem, N.H.
The settlement between GPB and Rosenberg became public in a filing GPB made with the SEC on Nov. 15.
A GPB spokesman said: “We were pleased to reach an agreement to settle all claims and lawsuits with Mr. Rosenberg.”
Rosenberg, speaking through his attorney Benjamin Wish of Todd & Weld, expressed similar sentiments: “Mr. Rosenberg is happy to put this dispute behind him so that he can focus his energies on the car business rather than the litigation business.”
Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.
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