Gayle Benson alleges conspiracy to sabotage auto dealership deals with Ray Brandt

Saints owner Gayle Benson has alleged that executives from carmaker Nissan Motor Company and rival local car dealer Matt Bowers conspired to sabotage a deal she had to buy Nissan and Infiniti dealerships in south Mississippi and Metairie from the Ray Brandt Auto Group.

The allegations were made in a letter dated March 15 from Benson lawyer Gregory Rouchell to Kyle Wierzbicki, Nissan’s director of dealer network operations, informing the Nissan executive that Benson believed the carmaker had illegally blocked her deal to buy the two dealerships and instead arranged for Bowers to buy them.

The letter is part of documentation filed with the Louisiana Motor Vehicle Commission, the state regulator for the car industry, in a case Benson has brought asking the agency to intervene in the matter. The documents were obtained by the Times-Picayune via a public records request.

Benson is objecting to Nissan’s decision to exercise its “right of first refusal,” a commonly used tool that allows carmakers to intervene in the sale of a dealership and put in a preferred buyer. The carmakers can do so for a variety of reasons, for example to increase the diversity of their dealer network, encourage additional investments or to put in someone with a better performance record.

The price paid to the seller must be at least as much as the initial offer if the carmaker opts to bring in a different buyer.

‘Civil conspiracy’

In his letter, Rouchell alleged that Nissan used missed deadlines set as part of the deal as a ploy to switch buyers unfairly. Nissan’s claim “is nothing more than a pretext” to justify an “untimely and unlawful exercise” of the right of first refusal, he wrote. The real motivation, he alleged, was to edge out Benson in favor of Bowers, who Rouchell claimed has personal relationships with top Nissan executives.

“Mr. Bowers (a competitor of Mrs. Benson) pressured Nissan/Infiniti — through his personal relationships with high-level executives — to exercise these untimely and invalid” rights of first refusal, Rouchell wrote. “It is the legal position of Mrs. Benson that Mr. Bowers’ actions give rise to an actionable claim against...both Mr. Bowers and Nissan/Infiniti for civil conspiracy,” in both Louisiana and Mississippi, Rouchell asserted.

A Benson spokesman declined to comment beyond what was in the documentation. A Nissan spokesperson declined to comment on the matter.

‘Unfounded’

Bowers’ attorney, Jeremy Hebert, said the allegations were “unfounded,” and added that Benson’s issue would be with the car company, not his client.

“Nissan was one of several car companies to exercise their right to bring in a different buyer in this deal and Matt Bowers was just the beneficiary in this case,” Hebert said. “We expect to move forward and close the deal.”

Bowers, 48, is a New Orleans native who has built up a regional network of more than a dozen dealerships in the last eight years, ruffling a few feathers along the way.

The allegations are the latest turn in the long-running drama surrounding Ray Brandt’s estate. Benson’s car group had agreed to buy the Nissan and Infiniti dealerships in D’Iberville, south Mississippi, as well as the Infiniti store in Metairie, as part of a broader deal last November to buy seven dealerships from the Ray Brandt Auto Group.

Ray Brandt, who started out in the early 1980s with a single Gretna dealership, died three years ago of cancer and his widow Jessica Brandt and his grandchildren, Alexis and Zachary Hartline, agreed last March to sell the car group and other assets to resolve their dispute over his estate.

The 14 car dealerships and collision centers and the associated real estate are valued at about $280 million and make up the bulk of the Brandt estate.

Executors of the Brandt estate agreed in November to sell Benson seven dealerships, including the Porsche dealership in Metairie, the Mercedes-Benz in south Mississippi and Toyota in Kenner.

Brandt agreed to sell the remaining dealerships to Troy Duhon’s Premier Auto Group — primarily Brandt’s cluster of dealerships in Harvey, including Genesis, Nissan, Kia, Chrysler and Hyundai, as well as a Chevrolet in south Mississippi.

In the months after the deal was agreed to, several of the carmakers intervened to exercise their right to install different buyers than those agreed to by the Brandt estate. That included Toyota, which replaced Benson with Damien Mills, owner of the largest Black-owned car dealership network in the country, as its preferred buyer for the Kenner dealership.

Kia in Harvey also was slated to go to Mills instead of Duhon, but eventually was assigned to Tameron Automotive Group of Daphne, Alabama when Mills pulled out of the deal. General Motors also opted to sell the south Mississippi Brandt Chevrolet dealership to Bob Boyt, a local dealer there, instead of Duhon.

A representative for Duhon said Friday that his Premier Auto had now completed the purchase of the five Brandt dealerships he is buying and would close on them next week. The Brandt estate had expected to close all of the deals next week, according to a source with direct knowledge of their plans.

However, the sale of the Infiniti in Metairie is now held up while the state regulatory case is pending.

Nissan, which owns the Infiniti brand, had been lining up a second alternative buyer for the Brandt Infiniti dealership in south Mississippi that Benson had agreed to purchase, according to a source with direct knowledge of that deal. The source said Baton Rouge car dealer David Fabre was doing due diligence on the potential transaction, but he pulled out of the deal after learning, from Benson executives, that terms of the deal with Brandt would likely change, with rent and other costs going up.

A spokesman for Benson said they had no comment. A Brandt spokesman didn’t respond to a request for comment.

Next steps

Though the right of first refusal is disliked by some car dealers who have argued that it infringes upon their rights to do business, it is rarely challenged. Neil Rogers, a compliance investigator at the state motor vehicle commission, said he has not seen a case in the four years he’s been in the job.

The commission has set April 11 for an initial hearing for the Nissan case. The commission, whose 15 members are mostly car dealers, typically tries to arbitrate a settlement in disputes of this nature, Rogers said.

If a settlement cannot be reached, it goes to a panel of three board members who are not car dealers and who can decide if state rules were broken in the transactions. If they were to determine Louisiana laws were broken, they could potentially impose fines and penalties or scuttle the deal.

That hearing is set for May 20 if a settlement isn’t reached.