Monitor overseeing Prime's majority owner wants oversight to continue

The court-approved monitor overseeing Prime Automotive Group majority owner GPB Capital Holdings Inc. for the U.S. Securities and Exchange Commission is recommending that he remain in place for six months.

Joseph Gardemal, managing director at consulting firm Alvarez & Marsal Holdings, said that after meeting with the U.S. regulator and GPB management, he suggests "continuation of the monitorship for a period of 180 days," according to an April 11 letter filed Monday in U.S. District Court in New York.

Gardemal was appointed Feb. 11 as monitor to oversee alternative-asset management firm GPB. He was to report to the court within 60 days his recommendation whether to continue a monitorship, convert a monitorship into a receivership, or recommend that one or more GPB entities file for bankruptcy.

The SEC in February filed a complaint against GPB, two related companies, GPB CEO David Gentile and two associates, alleging securities fraud.

Gentile, who has resigned as GPB's CEO, and two associates also are charged by the U.S. Department of Justice with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and securities fraud. Gentile pleaded not guilty to those charges, as well as a wire fraud charge.

Gardemal, in the letter, said audit and valuation reports haven't been completed for GPB by outside consultants.

"We continue to work with management in connection with the development of the most appropriate investment strategy for each of the GPB funds moving forward," he wrote. "Further, my team continues to work with management in connection with determination of the most appropriate approach to the retention or disposition of certain assets of GPB."

The SEC wanted the monitor to protect GPB's assets, including the more than three dozen Prime dealerships which it said represent at least 70 percent of GPB's revenue. Several states also have filed lawsuits against GPB and individual defendants.

Prime Automotive Group of Westwood, Mass., ranks No. 18 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 31,529 new vehicles in 2020.