MOTV8 Posted March 24, 2009 Share Posted March 24, 2009 Corvette deal prompts lawsuitA Mooresville company has sued General Motors for almost $14 million, saying the automaker broke a deal that would have allowed the plaintiff to sell souped-up Corvettes for more than $500,000 each.Riley Technologies planned to build the cars according to GM specifications and sell them to race teams. Doing that required GM's authorization, which Riley said it got in 2007. The lawsuit includes an e-mail from Nov. 30 of that year in which a GM racing manager told a racing sanctioning body that Riley “will be responsible for build of the vehicles.”With that, the lawsuit claims, Riley expected to recoup the money invested in research and design of the race cars by selling them and parts to teams. Each Corvette lists for $525,000 on Riley's Web site, with “adjustable rear wing to balance the downforce of the nose” and “electric drink bottle system with quick disconnects.” Last fall, however, GM announced that Pratt & Miller of New Hudson, Mich., would build the Corvette. Riley executives learned of the switch from a news report that came out as they wooed potential Corvette buyers from Belgium.“Obviously, we lost that sale right there,” said Ron McMahon, Riley's vice president, chief financial officer and general manager.Riley Technologies was founded in 2001 in Mooresville – dubbed “Race City” because of its many motorsports companies – and has built and sold cars for other racing series. Like other automotive companies, however, Riley has seen a slowdown during the recession. Of its normal work force of 35, McMahon said, about 17 are working regularly now.Riley claimed in its lawsuit, filed Jan. 27 in state court and moved to federal court this week, that it has lost nearly $2 million so far on the GM deal and more than $12 million in profit on future sales of Corvettes and parts.“People and companies change their minds all the time, and that's fine and dandy,” said Kenneth Keller, Riley's attorney. “But if it causes a company to lose money, they need to make it right.”GM hasn't yet filed a response to the suit. John Culver, an attorney for GM, declined comment on specific allegations but said Tuesday that the automaker “denies liability and intends to defend the case vigorously.”The case deals with homologation, the process by which a company builds a car for racing that must be approved by the automaker and a sanctioning body. With its Corvette, Riley Technologies claimed that GM asked it to build a car that would be sanctioned by the Federacion Internationale de L'Automobile, or FIA.There was no formal, written contract, McMahon said, but “there's that e-mail and a number of conversations beyond that. There's no question in their mind what we were doing.”After the Pratt & Miller news came out, Riley executives met with Steve Wesoloski and Mark Kent of GM Racing on Sept. 22, according to the lawsuit. Despite Kent saying GM would “make it right,” the companies haven't resolved the dispute, leading to the lawsuit.So far, Riley has built two Corvettes and sold one to LG Motorsports, which – according to the lawsuit – can't race the car in FIA races because GM hasn't approved it.Riley executives don't know how many Corvettes they would have sold. With other cars, McMahon said, the company has sold as many as two dozen and even four dozen.“It usually takes 10 cars before you get your money back,” he said. Typical GM, what a mess....although I'd rather have a car prepped by P&M too! Link to comment Share on other sites More sharing options...
Bigfoot Posted March 24, 2009 Share Posted March 24, 2009 If there was no contract signed, why would you dump money into it like that?I really don't know if they have much of a leg to stand on with just an email. Seems pretty flimsy to me. Link to comment Share on other sites More sharing options...
Desertdawg Posted March 24, 2009 Share Posted March 24, 2009 I don't know Sean, properly formatted and recorded emails will stand up in court now. If the "GM racing manager" that was conversing through email with Riley was in the correct position with GM to make the official decision about approving the project, the courts will accept the emails as evidence of a written contract/agreement...At least it's a round-a-bout way to get the stimulis money into the hands of the working man...Heck, I wonder if Obama thought his stimulis plan also included "trickle down economics" Link to comment Share on other sites More sharing options...
dewey Posted March 24, 2009 Share Posted March 24, 2009 Heck, I wonder if Obama thought...I seriously doubt it, the man doesn't seem to think a whole lot. Link to comment Share on other sites More sharing options...
Big Poppa Posted March 24, 2009 Share Posted March 24, 2009 I'll be at LG tomorrow, I'll get to the bottom of this.... Link to comment Share on other sites More sharing options...
dewey Posted March 25, 2009 Share Posted March 25, 2009 I'll be at LG tomorrow, I'll get to the bottom of this....Do me a favor, and let Lou know:To finish first, you must first finish.Then tell him good luck! Link to comment Share on other sites More sharing options...
Big Poppa Posted March 25, 2009 Share Posted March 25, 2009 Should I just go ahead and call him Lou? I met Reese Cox the other day. Wasn't that pleasant as it came right at the tail end of him chewing on one of his employees asses. Link to comment Share on other sites More sharing options...
Ted Y Posted March 25, 2009 Share Posted March 25, 2009 Should I just go ahead and call him Lou? I met Reese Cox the other day. Wasn't that pleasant as it came right at the tail end of him chewing on one of his employees asses.If you're a pimp, that's not all bad... Link to comment Share on other sites More sharing options...
az57chevy Posted March 25, 2009 Share Posted March 25, 2009 I wouldn't risk a company's assets/profits on an e-mail Link to comment Share on other sites More sharing options...
Bigfoot Posted March 25, 2009 Share Posted March 25, 2009 I wouldn't risk a company's assets/profits on an e-mail Ding ding ding. Winner winner, chicken dinner. Link to comment Share on other sites More sharing options...
MOTV8 Posted March 26, 2009 Author Share Posted March 26, 2009 Paging BP....Well....what did Lou say? Do they plan on getting a P&M car? Link to comment Share on other sites More sharing options...
Big Poppa Posted March 26, 2009 Share Posted March 26, 2009 I never actually spoke to Lou. (no big surprise there) I started to mention it to the guy that was giving me the tour of the shop, but right about that point we walked into the race shop area, and I didn't want to get throwed out. After that I forgot to ask when we returned to the showroom area. I didn't see an extra race car sitting back there, so they either haven't taken possession of the car yet, or they're keeping it elsewhere out of the way. Link to comment Share on other sites More sharing options...
Tim Posted March 28, 2009 Share Posted March 28, 2009 I don't know Sean, properly formatted and recorded emails will stand up in court now. If the "GM racing manager" that was conversing through email with Riley was in the correct position with GM to make the official decision about approving the project, the courts will accept the emails as evidence of a written contract/agreement...At least it's a round-a-bout way to get the stimulis money into the hands of the working man...Heck, I wonder if Obama thought his stimulis plan also included "trickle down economics" Having attended law school and taken contracts I and II, the plantiff must show that, in lu of an actual contract that there were reasonable implications that could form an 'implied' contract or an implied agreement or that any actions by the other party could constitute a reasonable reliance by Riley that they were to receive the permission required.I've stated it poorly and that was contract law in California...some time back, but Processor has many case that resulted in the plantiff winning on just the fact that a public statement was made. Link to comment Share on other sites More sharing options...
Desertdawg Posted March 29, 2009 Share Posted March 29, 2009 I stayed at a Holiday Inn Express, it was way cheaper than law school!!! Link to comment Share on other sites More sharing options...
Tim Posted March 29, 2009 Share Posted March 29, 2009 I stayed at a Holiday Inn Express, it was way cheaper than law school!!!Well they didn't have them back then.....took a long time to pay off those loans. Link to comment Share on other sites More sharing options...
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