AutoCanada Inc. and the company’s founder and former CEO Patrick Priestner have settled a longtime legal battle, with neither party admitting wrongdoing or liability.
The Edmonton-based dealership group launched a C$250 million ($184 million U.S.) lawsuit against Priestner in 2019, alleging the former company executive “breached his fiduciary and other duties to AutoCanada by appropriating corporate opportunities of AutoCanada to acquire dealerships privately.”
The suit revolved around several dealerships AutoCanada was not able to purchase at the time because of certain automakers’ prohibition on publicly traded groups acquiring their stores.
Priestner — who founded AutoCanada in 2006, served as CEO until 2014 and as board chairman until 2016 — countered in a 2019 statement of defense that the dealerships he purchased through privately held CanadaOne Auto Group were acquired with the “express permission” of AutoCanada. He also claimed the lawsuit was filed in “bad faith.”
Both AutoCanada, which now owns 83 franchised dealerships in Canada and the United States, and CanadaOne, which owns 29 new-car stores across four provinces, have continued to expand over the intervening four years.
In a joint statement Sept. 8, the two companies announced they had agreed to resolve the 2019 suit against Priestner. They did not provide full details about the settlement, but said neither party will admit wrongdoing or liability, and that some real estate will change hands as part of the resolution.
AutoCanada will sell two properties on which CanadaOne dealerships are located to CanadaOne, while CanadaOne will amend the leases for two properties it owns that house AutoCanada dealerships.
The two companies have also agreed to “co-operate on certain commercial matters for each other’s mutual benefit.”
