Ford Sues a Bunch of Canadians Over GT Supercar Flipping Scheme

Ford accused a group of conspirators of reselling the car twice within weeks of getting it.

Ford

Ford filed a lawsuit against a Canadian Ford GT buyer, and a group of alleged co-conspirators, over an alleged scheme to flip the car for profit, reports Automotive News. According to Ford, that 2018 GT didn't stay in Canada for long as it was resold within weeks of delivery to a buyer in Europe, eventually making its way to a final buyer in Hong Kong. That's one worldly Ford GT. 

To understand why reselling your own supercar is such a big problem, we've got to go back to Ford's GT sales process. Just getting on the GT's would-be owner's list was quite the ordeal. Ford hand-picked just 1,350 people to buy a GT, this included influencers, celebrities, and others who Ford felt would be able to broadcast the coolness of the car to as many people as possible. 

You also had to plop down $450,000 for the pleasure.

That left many interested parties out in the cold. But to prevent those lucky 1,350 from making a quick buck selling their cars to those who weren't as lucky, Ford instituted a no-flipping clause in its sales contract. Buyers were prohibited from reselling the Ford GT for two years after delivery. Wrestler John Cena was infamously busted for violating this anti-flip rule, which was noted several times in the sales paperwork to make it as clear as possible. (Cena eventually settled with Ford.)

Ford

Now another one of those hand-picked buyers has gotten on Ford's bad side: Steven Hudson, the former CEO of both Element Financial Corp. and vehicle servicing firm Engineered Automotive. 

According to court documents cited by Automotive News, Ford claims that they negotiated with Hudson through a co-plaintiff in this lawsuit, Downtown Ford in Toronto. Hudson never finalized the deal, but rather, a holding company allegedly held by Hudson's ex-business associate and now co-defendant Bradley Nullmeyer, did. Nullmeyer was the former CEO of Element Fleet Management Corp. in Toronto, a company connected to Hudson's former company, Element Financial Corp.

Ford claims that it was wasn't aware that Hudson had no ownership stake in this holding company during these negotiations, thus allowing the holding company to purchase the car. Confusing the plot even more, Hudson claims that he didn't know that Nullmeyer's holding company was purchasing this Ford GT in his name.

“Mr. Hudson is now aware someone else used his name without authorization," Hudson's lawyer Chris Paliare told Automotive News. "When Ford brought this purchase to his attention, Mr. Hudson cooperated fully in the process [and] provided proof he had no involvement in the initial purchase...nor any subsequent sales transactions.” 

That being said, Nullmeyer allegedly stored the Ford GT at Hudson's current company, Engineered Automotive, for about a month. Engineered Automotive's court filing denies being "party to any conspiracy" in the sale of the GT.

Ford

Just 20 days after the sale, all of the shares in Nullmeyer's holding company were sold to Timothy Quocksister, who serves as the president of Silver Arrow Cars in Victoria, B.C., a high-end auto dealership which primarily sells to overseas buyers. Ontario-based vehicle broker Jeffrey Seigel allegedly negotiated the holding company's sale for a $94,190 U.S. commission from Quocksister. Seigel also received $148,169 U.S. from Nullmeyer, which was described by Justice Edward Morgan as a "secret commission"  in court documents.

Seigel was accused of lying under oath about his interactions with the holding company in a court decision by Morgan, which Seigel denies. He has since been brought into this complicated court case through a $1,116,810 U.S. third-party claim by Quocksister. Seigel told Automotive News that he cannot discuss the case. Quocksister claims that he didn't know about the resale restriction, but Morgan and Seigel both blew holes in that argument. Seigel testified that he discussed the no-flip rule with Quocksister, and Quocksister himself admitted that he received the confirmation order (which explicitly states the no-resale rule) in a package of material from Seigel. 

Ford

“Given the notoriety of these rare, ultrahigh-end cars among car dealers, Seigel’s statement [about talking with Quocksister about the restriction] makes a certain amount of sense," Morgan says. "One does not pay C$1,500,000 for an automobile without knowing a little something about it.” 

Quocksister sold the car to Richmond, B.C., dealership SR Auto Group for $1.35 million U.S. the same day that he purchased it from the holding company: May 1, 2018. At that time, it had been half a year since Ford initiated a high-profile lawsuit against John Cena for reselling his Ford GT. SR Auto Group then quickly resold the Canadian GT to an undisclosed buyer in Hong Kong—all still within the two-year no-resale period. The current location of the car was not specified in court documents. 

Nullmeyer's lawyer told Ford's lawyer that he "vehemently denies the allegations in the claim" in a letter quoted by Automotive News. Likewise, Quocksister declined wrongdoing to Automotive News but would not discuss specifics in this case. 

Ford discovered that the GT was for sale in Europe, per court documents cited by Automotive News. Morgan upheld a temporary injunction blocking the sale of the GT on Nov. 13, 2019, ahead of the trial for this lawsuit, which has not been scheduled yet as of this writing. Ford is now suing the trio in the Ontario Superior Court of Justice over a civil conspiracy to improperly acquire the car for resale, per Automotive News. The lawsuit seeks $750,000 U.S. in damages for misrepresentation and breach of contract, the revocation of the original sale deal, the blocking of any resale or transfer of the GT as well as attorney fees. 

Both a Ford spokesman as well as Downtown Ford General Sales Manager Tim Foster would not comment on the pending litigation to Automotive News. The Drive also reached out to Ford and will update this story if we get a response. Given that the first legally resold Ford GT got three times its sales price at auction, the last laugh's on these guys regardless of how the court case works out. You only got roughly twice what you paid for it? Ha-ha! 

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