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Terry Taylor, who built a dealership empire in part by granting equity stakes to his general managers, is being sued by one of his former managers, who accuses him of fraud. The suit alleges Taylor inflated expenses and withheld revenue that should have been shared with the minority partner.
Other minority partners say that if the revenue-hiding charge is true, they will want recompense, too.
The charges threaten to drag the publicity-averse Taylor into the spotlight and undermine a key strategy that he has used to accumulate more U.S. dealerships than any individual.
The exact number of stores that Taylor owns remains unclear. But former and current partners and business associates estimate he owns anywhere from 120 to more than 150 U.S. rooftops, which would trail only four publicly traded dealership groups.
His company, Automotive Management Services Inc. in West Palm Beach, Fla., provides support for his dealerships. Taylor, through his lawyer, did not respond to questions as to whether AMSI provides those services to other dealerships as well. The lawsuit contends AMSI inflated the cost of the services it provides, thereby fattening Taylor's wallet at the expense of his store manager equity partners.
The charges are in a counterpunch lawsuit filed Nov. 16 in Putnam County, Tenn., by Michael Petrello, a former general manager at a Taylor-owned dealership. A related suit has been filed in West Palm Beach as well. Petrello is represented by the Orlando office of the law firm of BakerHostetler. It was one of a dozen law firms that helped to unravel Bernie Madoff's Ponzi scheme and win financial restitution for his victims.
Petrello, 36, ran Taylor's Ford-Lincoln of Cookeville, in Tennessee, about 80 miles east of Nashville, until being terminated in July. Petrello, who still owns a 20 percent minority interest in the store, says he was fired without cause.
In an email to Automotive News, Taylor's lawyer wrote, "It was only after Mr. Taylor learned that Mr. Petrello was actually spending very little time at the dealership attending to its business, and after Mr. Taylor confirmed with several co-workers that Mr. Petrello was only coming in a few days per week and then only for a few hours, that he lost trust in Mr. Petrello and decided to terminate...