Whistleblower David Rosenberg reaches $30M settlement with Prime Automotive Group

Denise Coffey, Cape Cod Times
·2 min read

Massachusetts-based Prime Automotive Group, owned by GPB Capital Holdings, reached a $30 million settlement with David Rosenberg, the company’s one-time CEO.

Rosenberg lives in Marblehead but oversaw dealerships throughout New England, including two on Cape Cod. He was fired after blowing the whistle on GPB’s financial mismanagement, and in the process, uncovering what could be a $1.8 billion Ponzi scheme.

Rosenberg and his father, Ira, have deep roots and a storied history in the automotive industry in New England. Ira Rosenberg purchased his first dealership in 1975, formed Ira Motor Group, sold it and then began Prime Motor Group with his son, David. The father-son duo grew the company to 20 dealerships in New England.

The late Ira Rosenberg, left, and his son David built the Prime Motor Group into an automotive empire with 30 auto dealerships in New England before selling a majority interest in the company to GPB Capital Holdings in 2017.
The late Ira Rosenberg, left, and his son David built the Prime Motor Group into an automotive empire with 30 auto dealerships in New England before selling a majority interest in the company to GPB Capital Holdings in 2017.

In 2017, the Rosenbergs sold a majority interest in Prime Motor Group to GPB Holdings, an alternative equity firm, for $235 million. But Rosenberg maintained an option to sell his remaining interest, which he tried to collect in 2019.

The settlement last week cleared the way for GPB Capital Holdings to sell Prime Automotive Group, one of the alternative investment firms' companies. The Group includes 30 dealerships in the imid-Atlantic and New England region.

Catch up on this story: Car dealerships, an investment firm and an alleged $1.8 billion Ponzi scheme

Rosenberg had filed a civil lawsuit in Norfolk Superior Court in July 2019 claiming GPB had engaged in securities fraud, and that he was fired in retaliation for blowing the whistle on the alleged financial irregularities. He tried to sell his shares in the company but filed suit alleging he wasn't fully compensated for the sale.

The $30 million settlement was good news for Rosenberg, though he couldn’t discuss the details of the settlement because of a nondisclosure agreement.

“I’m very happy about the settlement and I’m grateful that that is behind me now,” he said in an interview Monday.

New owners: Copeland, Scarpellinni purchase Hyannis Chevy, Subaru dealerships

Rosenberg is already expanding another car business: He has six dealerships under the DSR Motor Group umbrella. They include Canobie Lake Toyota and Canobie Lake Honda in Salem, New Hampshire; Tri-City Subaru and Tri-City Dodge, Jeep, Ram in Somersworth, New Hampshire: White River Subaru in White River Junction, Vermont: and Jack Chevrolet in Saco, Maine.

“My father would say, ‘Congratulations. I’m happy for you. It’s time to move on,’” Rosenberg said.

In April, Todd Copeland and Bryan Scarpellinni purchased the Copeland Chevrolet and Copeland Subaru dealerships — formerly Prime Chevrolet and Prime Subaru dealerships — on Ridgewood Avenue in Hyannis.

The dealerships were owned by GPB Capital Holdings but when two top GPB executives were indicted for fraud earlier this year, the Prime Automotive Group dealerships went up for sale.

Contact Denise Coffey at dcoffey@capecodonline. Follow her on Twitter: @DeniseCoffeyCCT.

This article originally appeared on Cape Cod Times: David Rosenberg reaches $30 million settlement with Prime Automotive Group