A Connecticut Kia dealership sued LMP Automotive Holdings Inc. last week for breach of contract and $100,000 in failed acquisition payments. But a dealership lawyer claimed a settlement may be on the way.
On Monday, K & W Enterprises and Ash Street Holdings sued LMP and First American Title Insurance Co. LMP allegedly broke the acquisition agreement for Kia of East Hartford and property by failing to provide the required information to Kia Motors America.
To consummate the sale, LMP needed manufacturer approval. Because of this alleged contract breach, the dealership and real estate company claim the deposits.
The dealership, owned by Joseph Klimas Jr., sold to LMP for over $9 million in July. The title business held the funds in escrow. The plaintiffs claim they cancelled the transaction on March 1 because the close was scheduled for Feb. 28.
Kia of East Hartford was advised by LMP on Feb. 18 that the deal had been cancelled and that Kia would no longer examine LMP’s application.
After failing to acquire finance for seven outstanding transactions, LMP said in February that it was investigating strategic alternatives for the company, including selling its eight franchised dealerships and four used-car stores. The Fort Lauderdale-based firm announced it will cancel all of the deals.
LMP said in a regulatory statement that the arrangement to buy Kia of East Hartford and property was cancelled on March 11 and that it expected no “material termination penalty.”
In some of LMP’s other abandoned deals, sellers kept deposits up to $2 million.
“The parties have agreed to resolve any disagreement between them subject to finalising appropriate documents,” said Kia of East Hartford lawyer Robert Feiner late Thursday.
The dealership and real estate firm sought damages, expenses, and the $100,000 in deposits.
No new court filings had been made as of mid-Friday afternoon.
Requests for comment from LMP management went unanswered.
LMP was supposed to report fourth-quarter earnings on Thursday, but announced it would postpone them. No new date was given.