Filed under: Government/Legal, Supercars, Lamborghini, Volkswagen, Earnings/Financials
VW sues Lamborghini O.C. for "outright theft" of $12 million
Last November, Lamborghini Orange County, formerly the world's largest Lambo dealer, shuttered its doors for good. The reason for the abrupt closing has finally come to light thanks to freshly released court documents from a lawsuit where Volkswagen accuses the dealership of pilfering $12 million in just eight days. According to Lamborghini's corporate overlord, Volkswagen, the Keuylian family sold 54 cars at rock-bottom prices and summarily ran off with the money without paying off its creditors. If true, that leaves VW high and dry, as the dealership had financed the high-end cars through VW Credit.
Two more lawsuits have been filed against the Keuylians by outside parties, claiming that they too are owed money from the erstwhile dealership. We've got to wonder how the dealership managed to fly under the radar while selling off seven cars per day over an eight day period. It's too early to know how this sordid tale will play out, but we don't see it ending well. Thanks for the tip, Jamie!
[Source: Orange County Register]
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Reader Comments (Page 1 of 3)
zamafir 2:07PM (1/13/2009)
Sounds about right given the info circulating car circles in the OC re OC Lambo's inability to pay the min payments on their floor leases. Looks like they not only couldn’t make the payments, but went ahead and stuck it to VW as much as they could - selling the cars at the cost of those floor leases. Nice.
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HotRodzNKustoms 2:38PM (1/13/2009)
Yeah this is pretty consistent with what I heard while at Cars and Coffee right after they closed.
Fooman 3:42PM (1/13/2009)
Yeah that pretty much explains it. Considering they had pretty much just finished the construction of the PCH showroom, which AFIAk never opened. They blew a huge amount of money at the last LA auto show too, the size of that booth was massive, sure they got loaned a Reventon for that, but OC Lambo paid for that floor space.
My assumption is that like the Harbor Blvd consigners they sold and took the money, then declared BK leaving the consigner in this case VW holding the bag.
Todd 2:07PM (1/13/2009)
A little foreshadowing as Dodge and GM dealerships do the same around June of this year?
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Will 2:08PM (1/13/2009)
"We've got to wonder how the dealership managed to fly under the radar while selling off seven cars per day over an eight day period."
Me too, you've got to wonder if many of those customers were not it on this and are now going to ship the cars to some place else at a profit.
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Joe K. 2:20PM (1/13/2009)
Having worked on the dealership side of this, reporting is largely inconsistent and cars are not always reported immediately after sale. They may have reporting dates of mid-month and end-of-month, meaning that VW would only hear about the sales at month close, which by then would be too late in this case...
Joe K. 2:21PM (1/13/2009)
PS, by "this" I do not mean this dealership, but 'this' as in allocation and sales reporting for a dealership.
Will 2:30PM (1/13/2009)
Thanks Joe, that makes sense, I should have thought of that too.
Jj 2:31PM (1/13/2009)
I think for a dealership like this 54 cars would be a lot to sell even in a month.
zamafir 2:39PM (1/13/2009)
"I think for a dealership like this 54 cars would be a lot to sell even in a month."
Right, but they're not buying the cars from VW, they're paying off the floor lease on the cars, and vw's not seeing until the end of the month as noted.
Jj 2:57PM (1/13/2009)
I understand that. My point is that to sell 54 cars in even one month they would have to be lowering the price substantially, as VW is alleging. It is not simply an anomaly with the sale reporting system.
Joe K. 5:20PM (1/13/2009)
You're both right, and I'm sure VW took notice when they saw the HUGE bump, but by then the cars would already be sold and the damage is done.
MikeofLA 2:10PM (1/13/2009)
So when they told me I was "Stealing" this Murcielago they weren't being metaphoric? Damn...
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Travis 2:11PM (1/13/2009)
wonder what the "rock bottom price" is for a Lambo? $100k?
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chad.dawkins 2:16PM (1/13/2009)
Yeah I was wondering that too. Thanks for stealing my thoughts ass!
*sues for $12 million*
Joe K. 2:27PM (1/13/2009)
Highly doubt the 100k. Maybe, and I mean maybe, its 20k less than MSRP. Floor plan in accounting terms should hit dealer invoice in the expected time of sale, so there is wholesale reserve, and hold back built into the invoice to cover the cost of the vehicle being there for roughly 3 months or so (I don't know Lambo's sales policy for financial reserve, Toyota's was around the 3-4 month amount as was HUMMER's) Regardless its a large chunk of cash, but not $75,000 or whatever.
jamie 2:31PM (1/13/2009)
Do the math, darling.
$12 million / 54 cars = about $250,000 per copy.
garlinski 2:12PM (1/13/2009)
that takes balls... big lime green bull balls...
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dedgsus 2:27PM (1/13/2009)
Gives new meaning to the word stealership.
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fizzandpop 2:29PM (1/13/2009)
Well that partly explains why I couldn't keep my sweet 0.9% APR when I re-upped my Audi. Guess who's paying for fraud like this? You and me. The popped-collar wearing douchebags made out like bandits again.
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