The owners of two Yellowstone County auto dealerships are trying to block the pending sale of Beartooth Ford in Columbus to the owner of Dave Smith Motors and take over the dealership themselves, according to Beartooth’s owner and court filings.
Garry Brayko, owner of Archie Cochrane Ford in Billings, and Don Jones, owner of Laurel Ford, exercised the right of first refusal in March. They argue in a filing in Stillwater County District Court that Beartooth Motors was overvalued by RFJ Holdings, which owns Dave Smith, because of pricey management contracts.
A right of first refusal is a term included in most auto dealer franchisee contracts with the manufacturer to prevent unwanted buyers. In this case, Ford Motor Co. offered the right to Brayko and Jones, who are operating a partnership called Columbus Spartan LLC.
The group that exercises the right of refusal typically must make the same deal offered. Archie Cochrane is the area's largest Ford dealer.
Tonya House, Beartooth Ford’s owner for 15 years, said Tuesday the deal with Dave Smith, one of the nation’s largest dealers, would bring new jobs to Columbus and better benefits to current employees. She said she believes the Yellowstone County dealers want to shut down her lot to eliminate a competitor.
“I absolutely will fight them," said House, 45. She added she has hired an attorney. "This deal is very important to my community. It’s very important to my employees. I am not going to be bullied."
Messages left for Brayko and a Laurel Ford representative were not immediately returned Tuesday. They’ve hired Billings law firm Moulton Bellingham PC.
In court documents, the two dealers argue that parts of the deal are too high or can’t be justified, including:
- A three-year contract for House to remain as general manager for $20,000 per month.
- A list of the dealer’s assets, including shop equipment, office supplies and work vehicles, for about $600,000.
- A valuation of the real estate of $1 million.
- A list of contracts for employees and other services for about $850,000 annually.
House said she never put her dealership on the market but was approached by RFJ last summer. Over the course of a few months, she changed her mind because she said she felt the sale was a good opportunity to grow the business and take care of her employees.
House said the sale could allow the dealership to expand from its current workforce of 14 employees to 75 within five years. Employees would also likely be eligible for better health insurance and 401(k) retirement plans at a larger company, she said.
“I don’t want to sell it, but I think this could be beneficial to everybody, and give Stillwater County a leg up … I think (Dave Smith Motors) is an amazing group, and I think they would be an amazing partner for me,” she said.
Beartooth Ford is Columbus' only dealer for new vehicles.
Kellogg, Idaho-based Dave Smith is one of the top 150 auto dealers in the country, according to Automotive News. It ranked first in the United States in 2015 for new retail throughout, largely because of its huge online presence, according to Automotive News Data Center.
The dealer is known from Idaho to the West Coast. Its lot often had more vehicles in stock than the population of Kellogg, largely because Dave Smith marketed heavily in Seattle and the Pacific Northwest.
The dealer was sold in 2015 to RFJ, which was founded by Texas auto dealer Rick Ford and backed by a New York private equity firm.
A hearing date in Stillwater County has not been set.