A prominent Tulsa auto dealership family and their business are being accused of fraud, numerous breaches of contract and intentionally sabotaging a dealership sold to a Dallas-based company last year for $46 million, according to a recently-filed lawsuit.
Jim Glover, his daughter Kristen Glover, his son Jared Glover, Claremore Automotive Group LLC (Glover’s company), the Jim Glover on the River dealership in Tulsa, former Jim Glover Chevrolet dealership general manager Steve Harrison and Jim Glover’s long-time advertising agent Holly Allen are all named as defendants in a lawsuit filed April 11 in Tulsa County District Court by Roundtree Autogroup LLC and Tulsa C Properties LLC.
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The suit alleges the defendants committed fraud, civil conspiracy, interference with contract and business relations, misappropriation of trade secrets, deceptive trade practices and numerous breaches of contract.
Phone messages left last week by The Frontier for the Glover family were not returned.
“While the allegations herein may read like a novel there is nothing romantic or redeeming about the behavior they describe,” the lawsuit states. “Jim Glover, his children, and a few others among Defendants duped Plaintiff Roundtree to the tune of over $46 million dollars.”
Jim Glover owned the Jim Glover Chevrolet dealership located at 8130 E. Skelly Dr., for 17 years, but sold the dealership and the property on July 17 to Roundtree, a Dallas-based family-owned holding company that has acquired a chain of numerous auto dealerships around the country.
Shortly after the Jim Glover Chevrolet property sold, Glover’s company finalized the purchase of the old David Stanley Riverside Chevrolet dealership location at 707 W. 51st St. in Tulsa for $11.8 million. Glover had opened the Jim Glover Chevrolet on the River dealership in mid-2016, court records show, after taking over Stanley’s lease of the property.
For years, Glover’s dealership commercialshave been ubiquitous in the Tulsa media market, outspending competitors by a two-to-one ratio, the lawsuit alleges, with commercials and other marketing material often prominently featuring Kristen Glover and Jared Glover as well as Jim Glover himself.
“As a result, Jim Glover and Claremore Automall developed a significant reputation in the Tulsa metropolitan area and the surrounding regions in connection with the sale, lease, and service of motor vehicles, and with the general operation of the Dealership,” the suit states.
It was that name recognition and reputation that prompted Roundtree to not only purchase the dealership and the property it sat on, but a license to use the “Jim Glover Chevrolet” name — as well as its social media accounts, customer lists, marketing materials, and other items — for a year after the purchase, the suit states.
Roundtree also entered into “goodwill” contracts on May 9, 2017 with the Glover family, the suit states, that would provide Roundtree with “close personal and ongoing business relationships and knowledge in connection with Jim Glover Chevrolet’s business through the personal ability, personality, reputation, skill, and integrity of the Seller, and other information relating thereto.”
“Jim Glover’s goodwill was sold for $5 million, Kristen Glover’s goodwill was sold for $500,000, and Jared Glover’s goodwill was sold for $500,000,” the suit alleges.
However, Roundtree alleges that shortly after it purchased Jim Glover Chevrolet, Glover’s new dealership, Jim Glover on the River, began violating a non-competition clause in the sale contract, as well as hiring employees away from the old dealership and hiring some employees who were fired later.
Some of those high-ranking employees who had stayed at the Jim Glover Chevrolet dealership after it was sold began removing the Jim Glover name from the dealership, stealing and passing inside information to Glover’s new dealership, and effectively working as a “Trojan horse” to destroy Roundtree’s business in Tulsa, the suit alleges.
“If there ever were a way to make a quick $46 million, and never really sell your business, just transfer everything and everybody that works to another location-this is it,” the lawsuit states.
Before the sale
In March 2016, David Stanley of Tulsa sold its dealership near Interstate 44 and the Arkansas River to Jim Glover. The land and buildings were being leased by Stanley from the owner of the, Fowler Properties of Tulsa C, LLC.
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Glover assumed the lease when the dealership was purchased, immediately rebranding the dealership “Jim Glover on the River,” and began operating it in addition to its “Jim Glover Chevrolet” dealership near Interstate 44 and Memorial Drive, according to court records.
In July 2016, the Glover company notified Fowler that intended to exercise a clause in its lease agreement that gave the company the option to buy the property, but over the following months the two parties could not come to an agreement on how much Glover should pay for the property.
Meanwhile, in late August 2016, Roundtree announced that it had partnered with Dallas-based private equity firm Lantern Capital Partners in order to acquire “high-quality automotive dealerships throughout the United States.”
In autumn 2016, Roundtree’s president, Matt Stinson, heard through a broker that Jim Glover was looking to sell his Jim Glover Chevrolet dealership, court records state, and Stinson flew to Tulsa to discuss the dealership at Glover’s home. Stinson was told that Glover wanted to wind down to focus on other pursuits and slowly turn things over to his son Jared and daughter Kristen, the lawsuit states
According to Roundtree’s lawsuit, Stinson told Glover that he believed that when acquiring a successful existing dealership, the person in charge of the dealership’s operations needs to remain at the dealership after the sale to make sure the practices that made the dealership successful continued. Glover responded by saying the dealership’s general manager Steve Harrison ran most operations at the dealership and was an indispensable part of it.
Harrison later agreed to stay at the dealership after it was sold, and a condition of the sale closing was that Harrison remain as general manager.
By November 2016, Jim Glover and Fowler had still not come to an agreement on how much should be paid for ownership of the property near the Arkansas River and Glover filed suit against Fowler to force the sale.
Court records show that as negotiations were occurring between Glover and Roundtree for the sale of the Jim Glover Chevrolet dealership, Glover was fighting in court to finalize the purchase of the Jim Glover on the River property.
On May 9, 2017, Roundtree and Glover, through Claremore Automall, came to an agreement for the sale of Jim Glover Chevrolet.
Under the agreement, Roundtree would obtain all of the dealership’s fixed assets, new and used vehicles, customer lists, marketing materials, social media accounts and other inventory and “goodwill,” the lawsuit states.
The agreement would also allow the dealership to continue to use the “Jim Glover Chevrolet” name for one year after the sale and included a non-competition clause that stated Glover could not hire the dealership’s employees for 36 months after the deal was finalized, the suit states.
In addition, the “goodwill” agreements were made with Jim, Jared and Kristen Glover, and Harrison was retained by Roundtree to be the general manager of the dealership. The sale, for which Roundtree paid a total of $46 million, was finalized July 24, 2017.
Nine days later, Glover and Fowler came to an agreement, with Fowler selling Glover the property for $11.8 million, according to property records. Glover’s suit against Fowler was dropped two days after the property was sold.
After the sale
After the Jim Glover Chevrolet dealership was sold to Roundtree, things began to go downhill fast, Roundtree’s lawsuit alleges.
The key individuals left behind after the sale who were now employees of Roundtree’s dealership served as a “Trojan Horse to systematically sabotage the dealership they sold, all to the advantage of Jim Glover’s competing dealership,” the suit alleges.
The day Roundtree’s deal with Glover closed, Harrison went on an extended hunting trip with Jim Glover, the suit states.
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“Shortly after his return from the hunting trip, Harrison began working against the benefit and interest of Plaintiffs and the Dealership and for the benefit and interests of Jim Glover and On the River, all while being employed as General Manager of the Dealership and being paid by the Plaintiffs to protect the Dealership’s interests,” the suit alleges.
Harrison did not respond to a message left on Friday by The Frontier at On the River, where Harrison is now employed as a manager.
The suit alleges that on one weekend shortly after the deal had been completed, Harrison gave away all Jim Glover Chevrolet merchandise, worth tens-of-thousands of dollars, to Tulsa’s John 3:16 Homeless Mission without telling Roundtree.
Harrison also allegedly ordered the Jim Glover Chevrolet signs outside the dealership to be immediately taken down without seeking approval of Roundtree, and that all other references to Jim Glover be blacked out at the dealership. Another sign displaying the dealership’s new name, Route 66 Chevrolet, was not installed until four months later, the suit states.
“Following removal of the Jim Glover Chevrolet signage, business immediately depleted, particularly drive-up business,” the suit states. “Customers simply thought the Dealership was closed and moved to On the River.”
Harrison also hired Glover’s long-time advertising agent Holly Allen as the dealership’s advertising agent, the suit states, “despite knowing that Allen was at the same time performing advertising work for Jim Glover’s other dealerships, including On the River.”
The suit also alleges that Harrison decreased loaner-vehicle purchases, reducing the dealership’s available inventory, and missed General Motors sales objectives, preventing the dealership from receiving more than $100,000 per month from General Motors.
Roundtree, in its lawsuit, states that despite being told to double the advertising budget, Harrison decreased it, and that he, working with Allen, performed other alleged acts of sabotage that lowered the dealership’s visibility in Google searches, lowered the quality of advertisements for the dealership, and ran commercials that stated Jim Glover Chevrolet had been sold and was having a “clearance sale-a-thon,” suggesting that the dealership was moving to a new location.
Meanwhile, at On the River, the Glover family began a “Grand Reopening” ad campaign that included titles such as “Relocating to Better Serve You!,” and stated in one ad that Jim Glover Chevrolet had “moved” to On the River, despite the name licensing agreement, the suit alleges.
Both Jim Glover Chevrolet’s commercial stating the dealership was sold and having a clearance sale and On the River’s “relocating” commercials were posed to YouTube on the same day by each dealership’s respective YouTube account.
Roundtree is also accusing Harrison and Allen of passing along marketing ideas from Route 66 Chevrolet to Jim Glover on the River. According to the suit, the dealership prepared a Black Friday promotion where customers would be given gift cards for varying amounts depending on the time they purchased a vehicle, but three days before the promotion was to start, On the River began the exact same campaign with the same gift card incentives.
“The intentions of Jim Glover, in his personal capacity and on behalf of Claremore Automall, and Harrison were to deceive Plaintiffs into purchasing the Dealership and then use Harrison to sabotage the Dealership’s business and, once that was completed, to enter the employment of On the River,” the lawsuit alleges.
Allen ceased working as Route 66’s advertising agent on Oct. 25, 2017, but before leaving she whited out all media advertising rates so they could not be used, the lawsuit alleges.
And after Allen left, Roundtree discovered that “Jim Glover had leveraged his influence and history of frequent advertising by instructing such companies to charge the Dealership higher rates for advertisements,” the suit alleges. “Jim Glover went so far as to state to one media company that he was ‘going to destroy the Route 66 location.’”
According to the lawsuit, Glover also downloaded the dealership’s customer information after the sale closed, and used it to later send direct mail and emails to customers requesting that they bring their vehicles to On the River for servicing, though that data had already been sold to Roundtree.
On the River also began poaching employees from Route 66, including Route 66’s sales manager who, after being terminated on Dec. 12, 2017, allegedly stole Route 66’s data on approximately 44,000 customers, the suit alleges. He was hired by On the River shortly afterwards, the suit states.
The lawsuit lists a total of 20 employees who were allegedly “poached” by On the River, including Harrison, who the petition says was fired by Roundtree on Dec. 11.
Glover’s attorneys have yet to respond to Roundtree’s lawsuit.
Source: https://t-tees.com
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