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Turners wins early battle in $5.5m lawsuit against Buy Right Cars vendor

Friday 9th August 2019

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Turners Automotive Group has won a preliminary battle with the former owner of the Buy Right Cars dealerships it purchased in 2017. 

Brandon Orlandini is suing Turners for $5.5 million, claiming Turners tried to avoid paying him under earnout provisions in their takeover contract. 

While he received $3.4 million for earnout period one, he only received $1 million for the second period. 

Orlandini, through his company Turnover, claims the NZX-listed company made wholesale detrimental changes to the business and therefore it doesn’t matter that he couldn’t reach the targets. 

While a full trial is scheduled for May 2020, in July Orlandini sought more information through ancillary orders, suggesting he might need the information to make a freezing order.

Orlandini’s lawyer told the High Court at Auckland a freezing order might be needed because Turners was getting rid of assets and might not be able to pay up if he wins. 

The information requested was not allowed through discovery ahead of the 2020 trial. It was for more information about Buy Right Cars’ financial performance after August 2018, including minutes of meetings, board reports, monthly accounting and information about decisions. 

In a judgment dated Aug. 1, Justice Anne Hinton refused the request. 

The judge said that she while understood Orlandini’s concerns over Buy Right Cars’ March 2019 result and the write off of the brand, it wasn’t enough to make the orders.  

“I would not, however, on the evidence as it currently stands, be prepared to find that there is a danger going forward of assets being disposed of, dealt with or diminished in value leading to a danger that a prospective judgment debt may be wholly or partly unsatisfied.”

In an addendum to her decision, the judge said in her view the extent of the orders was unnecessary, although she was aware relations had soured between Turners and Orlandini. 

“I would have thought it productive for the parties to find a way in which the defendant’s basic 2019 financial statements and related information could be provided to the plaintiff’s solicitor and/or independent accounting adviser on the basis of non-disclosure to Mr Orlandini.”

“This is not a case where there is the usual concern over providing a plaintiff with details as to a defendant’s financial position. The plaintiff will have had many of those details until a year ago and is not in competition with the defendant.

Shares of Turners closed at $2.32 yesterday, and have declined 2.1 percent so this year, lagging behind a 21 percent gain on the S&P/NZX All Index. 

(BusinessDesk)

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