3 Benson auto dealerships may be changing hands
Northside Ford’s owner is negotiating to acquire three San Antonio auto dealerships formerly owned by the late billionaire Tom Benson.
Mark Woods said he expects to close sometime next month on the purchase of Mercedes-Benz of San Antonio, Fiesta Honda and Alamo City Chevrolet. Terms are confidential.
The dealerships are currently owned by Benson’s daughter, Renee Benson, and her son, Ryan LeBlanc, Woods said. Tom Benson, whose business empire included the New Orleans Saints and Pelicans, died at age 90 in March.
Renee Benson took ownership
KCO7’s principals include Paul Kromwyk and Cary Meadow, who Morris alleged were fired for cause from Cappello Capital Corp., the former investment bank and financial adviser for both AAOG and Kern River Holdings.
Attached to Morris’ declaration was a 2016 claim Cappello filed against Meadow and Kromwyk with the Financial Industry Regulatory Authority, or Finra, the securities industry’s self-policing organization. Cappello accused the pair of fraud and misappropriation of confidential information, among other claims. The outcome of the case, which did not involve AAOG, couldn’t immediately be determined.
Kromwyk, as a Cappello director, “and presumably Mr. Meadow,” had access to all of AAOG’s, Kern River Holding’s and Western’s confidential information while at Cappello, Morris said in his declaration. Morris believes the pair used this insight in acquiring the debt. A call to Kromwyk and Meadow’s office in Santa Monica, Calif., was not returned.
Kromwyk and Meadow first approached the companies’ management as part of their due diligence in August, Morris said.
“They … stated they (and their still unidentified investor) had no real interest in being a lender to the (companies) but rather intended to use their debt interest to acquire the (companies and their) assets,” Morris said in the court filing.
At an Oct. 17 meeting in New York, KCO7 handed AAOG CEO of the dealerships in 2016 as part of a settlement of a bitter legal battle with her father over her late mother’s sprawling estate, the San Antonio Express-News reported at the time.
The dealerships were part of the 1980 Shirley Benson Testamentary Trust, which was valued at $1 billion. Renee Benson assumed control of the trust, which also included all of San Antonio’s Lone Star Capital Bank, a portion of a large ranch in Johnson City, an airplane, a multimillion-dollar home in Lake Tahoe, other real estate and cash. Shirley Benson was Tom Benson’s first wife.
Emily Harrison Liljenwall, attorney for Renee Benson, said she could not comment on the potential sale of the dealerships.
“What I can tell you is, I approached them,” Woods said. “They were willing to sell it. They want to redirect their financial and intellectual capital elsewhere.”
The three dealerships all are within 2 miles of Woods’ Northside Ford at 12300 San Pedro.
“It’s just kind of a natural fit,” Woods said of the three dealerships. The proposed sale includes the dealership businesses and their real estate.
The planned sale of the three dealerships was first reported by the New Orleans Advocate.
Woods bought Northside Ford in 2010. His only other dealership is a Mercedes-Benz franchise in Medford, Ore., acquired in 2015.
Woods, 51, is the son of Gary Woods, president of McCombs Enterprises, the management firm for B.J. “Red” McCombs family investments. McCombs, who also owns local car dealerships, and Gary Woods are not involved in the acquisition of the three Benson dealerships, Mark Woods said.
Shirley Benson’s trust was set up shortly after her death in 1980, before Tom Benson bought the Saints and Pelicans. In 2015, Renee Benson had challenged the competency of her father, who was the trustee.
Later that year, Bexar County Probate Judge Tom Rickhoff appointed co-receivers of the trust after hearing two days of testimony that revealed Tom Benson had secretly moved millions of dollars of trust funds to a different bank and had relocated some trust records, the Express-News reported.
The settlement of the dispute involved a “corporate reorganization,” according to a lawyer involved in the matter.
At one time, the Benson family owned about 30 dealerships. By 2015, there were five locations — the three in San Antonio and two in New Orleans.
Early last year, Tom Benson and his estranged daughter reached a confidential settlement regarding her ownership stakes in the Saints and Pelicans. The pair had been feuding about the teams’ values. His third wife, Gayle Benson, became the sole beneficiary of an estate controlling the teams. Robert Morris — Patrick Morris’ father and the majority owner — a notice of default, claiming Kern River Holding “was insufficiently hedged.” In the court papers, Patrick Morris said KCO7’s hedging requirement was stricter than the previous lender’s.
KCO7 elected to charge default interest of 2 percent and 3 percent over the floating rate on the loans, Morris added.
“I believe that this meeting — with its orchestrated default notice — was a transparent attempt to intimidate AAOG into handing over the (companies) to KCO7 for little to no value to its shareholders,” he said.
Morris said they tried putting additional hedges in place with no success.
AAOG executives met with KCO7 again last Wednesday, but Morris said they could not resolve the “alleged defaults,” Morris said.
Kern River Holding was scheduled to make an interest payment the following day. Morris said making the payment jeopardized the companies’ short-term ability to meet their “going concern obligations” and “long-term ability to maximize the value of (the) businesses for all of (their) stakeholders.” So the companies sought bankruptcy protection.
The two largest unsecured creditors listed in AAOG’s petition are Camden Financial Services of Irvine, Calif., owed $4.2 million, and Air Quality Consultants Inc. of Huntington Beach, Calif., owed $1.8 million.