One of the owners of the Motor Werks Auto Group has parked an internal power struggle with his business partners in Cook County court, asking a judge to place the northwest suburban collection of luxury car
dealerships into receivership to force the other two owners, including Motor
Werks’ founder, to sell the dealerships and split the proceeds according to the
terms of a purported deal struck a decade ago.
On Oct. 28, James Hub, former Motor Werks general manager
and one of the partners at the auto dealership group since 1997, filed suit in
Cook County Circuit Court against Motor Werks and the auto group’s two other
ownership partners, dealership founder Paul Tamraz and partner Nicholas
Pontikes, alleging they have improperly gone back on an agreement among the three
men to sell the dealerships as a way of ensuring the value of their interests
in the business.
The complaint does not specify how much Hub believes either
Motor Werks businesses or his ownership stake may be worth.
According to the lawsuit, Hub and his partners signed the
agreement in 2006, as they were concerned about what might happen to the value
of their ownership interests should one of the partners die or become disabled.
To maintain that value, the men agreed to only sell their ownership interests
as part of a sale of the entire auto group.
Further, the partners agreed to require a sale of the entire
auto group should either Hub or Tamraz die or become incapacitated, or after an
“operating period” of five years, whichever came first.
Hub’s lawsuit said that operating period ended in 2011.
However, in the years since, Hub alleged Tamraz and Pontikes
have refused to sell. Further, Hub alleged Tamraz has actively sabotaged sales
negotiations. At one point, the lawsuit alleges talks with a prospective buyer
failed after Tamraz demanded, as a condition of the sale, that Hub and Pontikes
agree to each pay him $10 million from their share of the proceeds.
Hub further alleged Tamraz has blocked Hub’s attempts to
market the Motor Werks companies, despite interest expressed by various buyers
over the past five years, including as recently as May 2016.
Hub also has alleged Tamraz has now begun to refuse to pay
Hub his share of Motor Werks’ profits, and “is creating a hostile environment
in the workplace and disparaging Hub to customers and to others in the business
“All of this is designed to force Hub to sell his interest
in the Motor Werks entities to Tamraz … at a price dramatically lower than what
Hub would receive if the Motor Werks entities were sold pursuant to the Sale
Agreement,” said Hub’s lawsuit.
To force the sale at a “fair price,” Hub asked the court to “appoint
a receiver for the purpose of marketing, negotiating and contracting to sell
and dispose of the Motor Werks entities as required by the agreement.”
Short of that, he asked the court to order Tamraz and
Pantikes to pay him “damages in such amount that Hub would have ultimately
received” from a complete sale of Motor Werks.
Hub is represented in the action by attorneys with the firm
of Freeborn & Peters, of Chicago.