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Lawsuit Accuses Nissan of “Destroying” A Dealer

It's not just the Detroit Three who face actions from dealers.

by on Jan.05, 2010

Ah, the joys of a bubble economy until Kahn's and Nissan's burst. Now who pays?

One of Nissan’s largest dealers today filed a $250 million fraud and breach of contract lawsuit against Nissan Motor Co., Ltd, Nissan North America, Inc. and Nissan Motor Acceptance Corp.

The Los Angeles Superior Court filing claims the automaker lied to one of its largest dealers, acted dishonorably and forced Orange County businessperson Michael A. Kahn to close his dealerships, sell his private jet and lose millions of dollars.

As of late October 2008, Kahn’s dealerships were, allegedly, “out of trust” about $7.7 million, meaning Kahn had sold cars financed by Nissan but used the funds for other purposes rather than paying off the loans.


According to the allegations, “Kahn was Nissan’s ‘go-to’ dealer in California.” At the request of Nissan, he acquired troubled or under performing dealerships and turned them around. “When a large automotive company sought to buy out Kahn in 2004 and again in late 2006, Nissan insisted that he not sell and told Kahn he was a key component of Nissan’s future plans in California.”