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Ford Motor Co. is suing participants in an alleged civil conspiracy to improperly acquire a custom-built 2018 Ford GT supercar, resell it for a profit and swiftly resell it again for yet another profit, all within a matter of weeks.
Ford charges the defendants with flipping a new GT model worth $690,800 and selling it for more than double that price within a few weeks, in violation of the manufacturer’s 24-month prohibition against reselling the vehicle, according to a case in the Ontario Superior Court of Justice.
The defendants are Timothy Quocksister, president of Silver Arrow Cars in Victoria, B.C.; Bradley Nullmeyer, former CEO of Element Fleet Management Corp. of Toronto; Steven Hudson, former CEO of Element Financial Corp.; and Engineered Automotive, a vehicle servicing firm in Concord, Ont.
It’s a complex, high-stakes tale in which all defendants deny wrongdoing while sometimes pointing an accusing figure at others among them. The dispute has generated a brown banker’s box full of documents filed with the court clerk.
Ford said in court papers that it learned the GT was offered for sale in Europe, and Justice Edward Morgan said an “undisclosed buyer” in Hong Kong had purchased it from an exotic car dealership in Richmond, B.C., SR Auto Group.
In a Nov. 13 decision, Morgan upheld a temporary injunction blocking the transfer or sale of the high-performance car pending trial, which isn’t yet scheduled.
Ford’s suit seeks to rescind the original sale deal and block any transfer or resale of the GT. It also demands $1 million in damages for misrepresentation and breach of contract, plus attorney fees.
“Ford’s evidence is that very few ‘supercars’ like this are manufactured and that it is very selective about who can buy this kind of vehicle,” Morgan wrote in his decision. “A very expensive automobile like this is often sold to dealers and collectors who use it for promotional purposes.”
To prevent flipping, the order confirmation form explicitly prohibited its resale or reconveyance for 24 months.
OWNERS CAREFULLY CHOSEN
A Ford spokesman said the resale restriction, “common for the world’s most exclusive cars,” is part of an extensive owner-selection process to “ensure the passion surrounding the Ford GT” is maintained. Ford selected owners “in part based on the likelihood they would showcase their Ford GT on an ongoing basis at events, on social media and on the road and at [race] tracks.” The spokesman said the company cannot comment on the suit itself.
Ford custom-built only eight 2018 model year GTs for Canadian purchasers at prices starting “in excess of” $500,000, the company said in court papers.
Pennsylvania lawyer Bryan Shook, who specializes in vintage-car law and transactions involving collectible and antique cars, said: “If you look at it from Ford’s business standpoint, it’s not good for business suing customers, but it has an interest in maintaining the brand and the value of the vehicle.” That includes requiring purchasers to prequalify and to “protect the price point.”
Concerns include use of “straw” buyers to hide the identity of the real purchaser or so the real purchaser can avoid disclosing his or her assets to the manufacturer, said Shook, who is not involved in the Canadian case.
At the same time, there are situations where a buyer’s financial or family situation may change within the two-year no-transfer period, he said.
THE STORY
Here’s what apparently happened, according to Morgan’s decision and documents filed by the parties:
Ford says it negotiated with co-defendant Hudson to sell the GT supercar through co-plaintiff Downtown Ford in Toronto. Hudson never consummated the deal.
Ford claims it was unaware at the time that Hudson had no ownership interest in the eventual purchaser, a holding company allegedly controlled by co-defendant Nullmeyer, Hudson’s then-business associate.
Hudson declined an interview, but the statement of defence filed in court said, “he was not aware of any allegation or suggestion that Nullmeyer had misled Ford.” The statement denies “any involvement in a conspiracy” and “making any misrepresentations to Ford.”
Hudson’s lawyer, Chris Paliare of Toronto, told Automotive News Canada: “Mr. Hudson is now aware someone else used his name without authorization. When Ford brought this purchase to his attention, Mr. Hudson cooperated fully in the process (and) provided proof he had no involvement in the initial purchase...nor any subsequent sales transactions.”
Paliare said, “Mr. Hudson has testified in this matter to clear his name and will continue to defend his reputation.”
Downtown Ford’s general sales manager, Tim Foster, said he cannot discuss the case until it is resolved.
Nullmeyer didn’t respond to requests for comment, but his lawyer told Ford’s lawyer in a letter that Nullmeyer “vehemently denies the allegations in the claim.”
‘SECRET COMMISSION’
Only 20 days after the initial sale, and despite the two-year ownership restriction, Nullmeyer’s holding company sold all its shares to Quocksister, the decision said. Quocksister’s Silver Arrows Cars is a collectible and luxury vehicles dealership. “Most of the cars Silver Arrows sells go to global buyers,” according to an August 2018 profile in the Victoria News. He denied any wrongdoing but declined to discuss the case with Automotive News Canada.
Quocksister negotiated the deal with the assistance of Concord, Ont., vehicle broker Jeffrey Seigel, who allegedly received a $126,560 commission from Quocksister, plus what Morgan described as a $200,000 “secret commission” from Nullmeyer.
Engineered Automotive allegedly stored the car for about a month on Nullmeyer’s behalf. Its court filing denied being “party to any conspiracy” or being involved in negotiations to sell the GT.
Quocksister contends he didn’t know about the resale restriction, but Morgan’s decision cited evidence that he did, including his admission that the confirmation order was in the package of material Seigel gave him. Seigel testified that he discussed the restriction with Quocksister, the decision said.
The decision said Seigel lied under oath by trying to hide his dealings with the owner of the holding company that bought the GT from Ford. In a court filing Siegel denied lying.
The judge continued: “Given the notoriety of these rare, ultrahigh-end cars among car dealers, Seigel’s statement [about talking with Quocksister about the restriction] makes a certain amount of sense. One does not pay $1,500,000 for an automobile without knowing a little something about it.”
‘TIDY’ PROFIT
Seigel, whom Quocksister brought into the case through a $1.5 million third-party claim, told Automotive News Canada that he can’t discuss the case.
Quocksister resold the car – “unloaded” it, as Morgan put it – to SR Auto Group the same day he bought it, May 1, 2018, the decision said. The price was US $1.35 million ($1,734,480 Canadian), “making for a tidy profit for Quocksister once the currency exchange rate is taken into account.”
SR Auto Group quickly resold it to “an undisclosed buyer from Hong Kong,” also within Ford’s no-transfer period, the decision said. SR Auto Group didn’t respond to phone and email messages.
The decision doesn’t specify the current location of the car.
Automakers’ anti-flipping suits are rare but not unheard of. In 2018, professional wrestler John Cena paid Ford an undisclosed amount to settle a case accusing him of improperly reselling his 2017 GT supercar only a few weeks into the two-year prohibition period. He had paid US $463,376 for the car.
They'll have to settle which means most, it not all, of the profit they made will be gone. Issue is with every Ford GT there was a contract that strictly prohibited flipping so there's no way around this. You can't sign a legal contract and decide to do whatever you want.
The path the car took seems confusing. It was originally bought in Toronto, then sold to Richmond, advertised in Europe (but didn't leave Canada) and then sold to someone in Hong Kong?
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Quote:
Originally Posted by maksimizer
half those dudes are hotter than ,my GF.
Quote:
Originally Posted by RevYouUp
reading this thread is like waiting for goku to charge up a spirit bomb in dragon ball z
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Originally Posted by Good_KarMa
OH thank god. I thought u had sex with my wife. :cry:
Greed is one thing. What surprises me is how the parties involved could somehow thought they were able to get away with it when the purchase contract has so clearly included that no-reselling clause for 2 years. At that point, it isn't really just greed. That greed has clouded their judgement.
If they could just hold on to the car and wait for the 2 year period to pass, I'm sure they can still turn in a health coin from flipping the car then.
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Originally Posted by SkunkWorks
There's no way any of these parties didn't know that what they were doing was a breach of contract.
Greed rules above all. Keen to see if the lawsuit holds up.
I'm sure if they had talked with a lawyer/accountant, they could of wordsmith a contract to transfer the car over to the new owner and save them from all of this shit storm.
But looking at Quocksister's website/dealership, I'm sure they have more shady stuff going on.
Yellow one is listed for sale on their site. The one that was sold to a buyer in HK was a different GT.
From what I heard the yellow one is owned by a car collector from Europe who spends time locally. It's the same guy who owns the Rolls Royce Sweptail and he also owned the MSO 688 SR sold a while back.
I had to chuckle when I read this "Quocksister contends he didn’t know about the resale restriction"
Tim Quocksister has been in car sales for a very long time and it is downright hilarious that he claimed "he didn't know" about the restriction. He had flipped 15 cars by the time he finished high school (1997 a year ahead of me at my school) and then he began working at Three Point Motors (Mercedes Victoria). He opened Silver Arrow in 2001.
I have spoken to a few people over the years who had deals go south with them. It's a car dealership so these things happen.
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i get that these manufacturers have an image to uphold esp if it's their halo product
but why should I let the automaker dictate what I do with my property? if I wanna use it as Uber, sell it, modify it, etc...at the end of the day it should be up to me the owner...i shouldn't need to have someone telling me when i can/cannot sell it
just sounds like a very expensive lease and you dont actually own it...
i get that these manufacturers have an image to uphold esp if it's their halo product
but why should I let the automaker dictate what I do with my property? if I wanna use it as Uber, sell it, modify it, etc...at the end of the day it should be up to me the owner...i shouldn't need to have someone telling me when i can/cannot sell it
just sounds like a very expensive lease and you dont actually own it...
It's a condition to purchase the vehicle. If the prospective owner does not agree with this term, then Ford is simply not going to sell him the vehicle, and he'll never be the owner in the first place. It's really as simple as that.
If the prospective owner agrees to the terms, then he is entering into a legally binding contract. Breach the contract, and you get sued. Nobody is holding a gun to the prospective owner to force him into buying in the first place.
Me thinks it's all pretty clear cut. And 2 years isn't even that long.
But to the average Joe, what they did... at least the first sale seems pretty smart.
1. Company A buys car
2. Company A goes "under"
3. Company B comes in to buy off Company A including all assets
4. Company B dissolves Company A after purchase
5. Company B now owns the car
Legally I think Ford can only go after Company A for the breach of contract, which doesnt exist anymore.
And owner of company can pick any reason why he decided to close the company and sell it to Company B
now as for SR, this one is more tricky, but I think SR will just say thry didnt buy the car from FORD, so technically Ford is not involved in the transaction at all....
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It's a condition to purchase the vehicle. If the prospective owner does not agree with this term, then Ford is simply not going to sell him the vehicle, and he'll never be the owner in the first place. It's really as simple as that.
If the prospective owner agrees to the terms, then he is entering into a legally binding contract. Breach the contract, and you get sued. Nobody is holding a gun to the prospective owner to force him into buying in the first place.
Me thinks it's all pretty clear cut. And 2 years isn't even that long.
do you read through the fine print when you buy electronics? many will say you cannot modify/hack them
it's also like signing a non-complete clause in certain jurisdictions
just because it's legal doesn't mean it's reasonable
especially in a capitalistic society like Europe/Canada/HK...for crying out loud this is a magnate's prized posession not some necessity like food or housing...i could care less what the manufacturers want/tried to force certain conditions if it's under my 100% ownership
That's nice and all except they did sign it and Ford has a butt load of money to drag your ass through so much paperwork and legal fees that you'll settle and beg for mercy before the next round of Mc.Donald's coupons hit your mailbox.
I had to chuckle when I read this "Quocksister contends he didn’t know about the resale restriction"
Tim Quocksister has been in car sales for a very long time and it is downright hilarious that he claimed "he didn't know" about the restriction. He had flipped 15 cars by the time he finished high school (1997 a year ahead of me at my school) and then he began working at Three Point Motors (Mercedes Victoria). He opened Silver Arrow in 2001.
I have spoken to a few people over the years who had deals go south with them. It's a car dealership so these things happen.
The difference is Ford made their contacts to make sure their GT’s get driven. Not just bought by collectors and tossed around in garages seeing zero miles but massive inflation gains. That’s not why they built the GT.
Edit: it’s their flagship car, which means it cost them massive amounts of money to develop. A few other things thag meant you were considered to buy the car was being a big ford guy, or having a massive social media following. Let’s be honest, flagship cars are marketing tools. You don’t want them hidden away in garages. You want those people with 5mil followers on insta taking photos everywhere and getting mad press. That’s how you bring up the next generation of Ford families
Ferrari doesn’t give a shit anymore about that stuff except for their image lol
the 2nd gen FGT has been very successful in Le Mans and other enduros (so it paid off)...but if they wanted to recoup more r&d dollars they could've simply increased the price tag
the magazines already had their share of PR...i really dont believe Ford built the streetgoing version mainly as flashy instagram bait
again, if you dont want it sitting with collectors, just lease it out like the Lexus LF-A...selling with conditions and expect buyers to honor it, lol
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Well done
