High Court battle over car dealer software agreement takes new twist as US execs are dragged in

  • Pendragon tech subsidiary is facing a claim from Asia-Pacific distributor
  • Evidence is being sought from the US for use in High Court proceedings
  • Three top executives in the US have had applications lodged against them

Time 7:10 am, February 7, 2024

A long-running legal battle involving a UK dealer management software firm’s distribution company in the Asia-Pacific region has taken a trans-Atlantic twist.

In January last year, Car Dealer revealed that dealer group Pendragon’s dealer management software subsidiary Pinewood Technologies (PWUK) was facing a $313m (circa £260m) claim by Pinewood Asia-Pacific (PWAP) – a reseller of its Pinewood technology – over alleged contract breaches.

PWAP claims the breaches meant it was unable to fulfil contracts that it had spent time and resources on building.

The case had been lodged the previous summer while Pendragon was the focus of a takeover battle but the stock market wasn’t told about the claim.

Pendragon subsequently failed to have the claim in the High Court against the Asian-based technology supplier struck out completely, although it was cut substantially, with some reports suggesting it could be as low as £1m.

An allegation of fraud was made during last October’s strikeout hearing.

Last week, Pendragon completed the £397m sale of its dealerships and leasing division to US dealer group Lithia Motors.

It saw PWUK hived off to take Pendragon’s place on the London Stock Exchange, with Pendragon renamed Pinewood Technologies Group and led by Bill Berman.

PWAP says that while Pendragon was being sold to Lithia and the subsequent agreement for Lithia to invest in Pinewood Technologies, due diligence would have been carried out, including considering possible liabilities.

It believes that communications are likely to indicate whether Pendragon intended to force a termination of PWUK’s contracts with PWAP, as well as other important information.

Now PWAP has lodged applications in Oregon against Matt Whitmer, Lithia’s director of mergers and acquisitions, and Bryan DeBoer, Lithia’s president and CEO, which it says have been granted.

PWAP has filed an application in Florida against Berman as well.

It wants the three executives to hand over ‘limited, but critical’ information ‘for use in connection with a fraud claim’ that PWAP intends to add to its ongoing High Court proceedings against PWUK.

Not only does it want to see documents that it said would have formed part of the due diligence process while the takeover battle was raging, it also wants testimonial evidence from the men.

It needs to make the applications to use evidence from the United States in non-US proceedings,

PWAP director Josephine Lee said: ‘We believe crucial evidence and information will be obtained during this process that will assist in proving our case and the actions of Pinewood Technologies UK and the extent to which Pendragon was aware of, or complicit in, those actions.’

PWAP says that it has informed counsel for both PWUK and Lithia about its latest move.

Both Pinewood Technologies and Lithia declined to comment when contacted by Car Dealer.

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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