Dealership Owner Derivative Litigation and Breach of Fiduciary Duty for Auto Dealers

When a dealership is closely held or family-owned, disputes among owners can threaten everything you have built—manufacturer relationships, floor-plan lines, staff, and community reputation. DiTommaso Lubin, P.C. represents majority and minority owners of automobile, RV, boat, motorcycle, and airplane dealerships in complex ownership disputes and derivative litigation.

Our lawyers have decades of experience in shareholder-oppression, LLC-member, and partnership disputes in closely held businesses, including derivative cases and double-derivative actions. We combine that knowledge of closely held entities with deep familiarity with the automotive and dealership industries.

What Is Derivative Litigation in the Dealership Context?

In many disputes, the real injury is to the dealership entity itself: profits are diverted, inventory is misused, opportunities are usurped, or books and records are manipulated. In those situations, the claim is often “derivative”—brought on behalf of the company rather than purely on behalf of a single owner.

We routinely advise dealer-principals, minority investors, and LLC members on when claims should be pled as derivative, direct, or both; how to navigate duties owed to the entity while litigating among owners; and the impact of franchise agreements, floor-plan covenants, and buy–sell agreements on litigation strategy.

Common Disputes Among Dealership Owners

We prosecute and defend cases arising from squeeze-outs and freeze-outs of minority shareholders and LLC members; disputes among family members in multigenerational dealerships; self-dealing and diversion of dealership opportunities to competing entities; undisclosed side deals with vendors, reconditioning businesses, or F&I product providers; excessive compensation or perks for controlling owners or managers; wrongful termination of dealer-principals or managers who are also owners; and disputes over capital calls, dividends, and profit distributions.

Emergency Relief to Protect the Dealership

In ownership disputes, timing is critical. We are frequently called upon to seek or resist emergency remedies such as temporary restraining orders to prevent termination of the franchise or floor-plan line; injunctions to stop dissipation or diversion of dealership assets; orders preserving access to books, records, and DMS data; and court-ordered accountings and inspections.

Business-Focused Outcomes

Not every ownership dispute should be fought to trial. We regularly help dealership owners resolve conflicts through negotiated buy-outs or sales of interests, governance reforms and revised operating agreements, mediation and structured settlements that allow the business to continue operating, and, when necessary, winding up and sale of dealership assets.

Talk With Our Dealership Owner Litigation Team

If you are a dealership owner, family member, or investor facing a partnership, shareholder, or LLC-member dispute, we invite you to discuss your options with attorney Peter S. Lubin or attorney James V. DiTommaso.

Call 630-333-0333 or contact us through our online contact form to schedule a free consultation about your derivative or fiduciary-duty dispute.

This page is for informational purposes only and does not constitute legal advice. Contacting us does not create an attorney–client relationship. Past results do not guarantee a similar outcome.