A nasty court battle might make Christmas dinner a little uncomfortable for these business owners.

Richard Duncan, founder of a Michigan auto dealership gave over 50% ownership to his daughter Gail. She must not have had the business sense he did, because the soon dealership experienced a $2M drop in value and suffered a debilitating bankruptcy.

When Duncan handed over control of the company, he had his daughter sign an agreement which included:

• a restriction on buying competing dealerships (which she did three times),
• a consulting fee of $20K a month to her father (which she didn’t pay), and
• continue a contract with the credit life insurance for Gail’s mother (which she didn’t do).

Gail also failed to pay Ford Motor Credit over $5 million worth of loans to cover new cars that sat on the lot. Ford Motor contacted them when the vehicles had sold, but they hadn’t gotten their money.

On top of all that, she pushed her father out as a minority share holder.

The jury was unsympathetic to Gail’s claims of not understanding the contract. They also accused her and her husband of favoring other ventures over her father’s dealership.

It took only two weeks of trial for the jury to tell Gail she needed cough up $4 million. Mr. Duncan didn’t say whether or not he cut her out of the will, too.

Tags: Auto dealership, Bankruptcy, Ford, Takeover