Would-Be Truck Dealers Seek $60M

4/19/2011 5:45:00 AM, Joe Harris
ST. LOUIS (CN) - A federal class action claims that an Indian truck maker and its Nevada-based partner took $60 million from prospective U.S. dealers, then refused to return the money after Mahindra & Mahindra announced it would not export any vehicles to the United States.

     Mahindra & Mahindra "is one of the world's largest manufacturers of trucks, farm equipment, and consumer vehicles," and partnered with Global Vehicles USA in 2006 to set up a distribution network in the United States, according to the complaint.
     Named plaintiffs Jerry Ackerman and Automotive Leasing Corp. say they paid a total of $300,000 for three Mahindra dealerships.
     They believe 300 other entities throughout the United States entered into identical dealer franchise agreements, which brought $60 million to Mahindra and Global.
     "Despite promising to import Mahindra vehicles for sale to the public through plaintiffs and members of the class, neither Global nor Mahindra ever imported any vehicles into the United States for distribution through its network of franchise dealers," the complaint states.
     Mahindra - one of the world's largest manufacturers of trucks, farm equipment and consumer vehicles - announced in August 2010 that it was ending its marketing relationship with Global and would not be importing any vehicles into the United States.
     The plaintiffs claim that despite their requests, Mahindra and Global have refused to release the money they paid for the franchises.
     The class includes all entities that entered into at least one Dealer Sales and Services Agreement and paid money for the right to sell Mahindra products and accessories. The plaintiffs seek actual and punitive damages for breach of contract. They are represented by John Toma. Attachment