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The owners of TriStar Automotive Group hope a federal bankruptcy judge will approve the bid of Don Lia, a Long Island auto dealer, to purchase the troubled company's nine auto dealerships in New Rochelle at an April 13 court hearing.
However, a legal dispute between TriStar and Robert Crabtree, stemming from the dealerships' 1989 sale, has yet to be resolved in federal court in White Plains.
Crabtree, former owner of the dealerships, filed suit against TriStar in December 1990, claiming breach of contract and fraud related to the sale. The suit which was later amended and transferred to U.S. District Court in White Plains, accuses TriStar of fraud, destruction of records and breach of contract under the Racketeer Influenced and Corrupt Organizations Act (RICO), and seeks $13 million in damages. Provisions of the RICO statute allow for triple damages and could bring a final judgment to $39 million if Crabtree prevails.
According to court documents, TriStar paid Crabtree $4.5 million at the closing of the sale on Sept. 8, 1989. Further payments were to be made following completion of a combined and consolidated balance sheet reflecting the value of the dealership chain at the time of closing.
Crabtree is seeking to foreclose on TriStates headquarters at 47 Cedar St., claiming default of a $7.5 million mortgage. Named as defendants in the suit are TriStar, the...