AutoCanada Inc. says it has launched a legal suit against company founder and former CEO and chairman Patrick Priestner over his private acquisition of some auto dealerships.
The Edmonton-based dealership group has alleged that during Priestner’s tenure at AutoCanada he breached his fiduciary and other duties by “appropriating” corporate opportunities for his own holding companies including Canada One Auto Group Ltd.
Priestner, who served as CEO from 2006 to 2014 and then executive chairman for two years, says in a statement that the claims are completely without merit.
He says that during his time at AutoCanada he repeatedly and thoroughly disclosed dealership acquisitions that the company could not buy because of restrictions by certain manufacturers on public companies owning dealerships. He says the acquisitions were specifically authorized by AutoCanada’s board of directors as in the best interest of the company.
The company says it has filed the yet-to-be challenged claims in the Ontario Superior Court of Justice and is seeking an accounting of profits, damages and establishment of a trust on the disputed dealerships.
AutoCanada operates 68 franchised dealerships in eight provinces in Canada as well as a group in Illinois in the U.S. and has over 4,200 employees.