Dealership General Manager To Receive $7.8 Million After 17-Year Court Battle

A dealership legal dispute in Minnesota has been 17 years in the making. Walser’s BMW Motorwerks, a dealership owned by the Walser family has been the source of numerous lawsuits from a former general manager. John Drewitz has sued and appealed against the Walser family since the late 1990s because he felt stiffed when he was fired and not compensated at all for his ownership in the store.

Drewitz was hired as a salesman at Motorwerks in 1990. At that time, Jack Walser was the store’s primary owner. By 1993, Drewitz had worked his way up to a general manager position at the store. However, Drewitz soon became more than a GM, he was part owner. In 1995, Drewitz entered into an employment agreement with Motorwerks to be the GM and vice president until March 1999. In 1996, Jack Walser’s sons, Paul and Andrew both purchased a 15 percent stake in the company.

Also, according to court documents, in 1995, “Drewitz also executed a shareholder agreement with Motorwerks. That agreement provided that Drewitz would purchase 20 percent of the outstanding shares of Motorwerks. It also granted Drewitz three annual options to purchase additional shares. Drewitz exercised one of these options, increasing his total stake in Motorwerks to 30 percent.The shareholder agreement provided that distributions would be paid to all shareholders on a pro rata basis.” Thus Drewitz owned 30 percent of the dealership. Then, in 1998, he was suddenly terminated. He was offered a severance, which he rejected, seeking compensation for his shares. Drewitz sued Motorwerks, wanting fair compensation for his shares.

What ensued was a back-and-forth legal battle between John Drewitz and the Walser family. During the litigation, the company was split up. Drewitz was unaware that this was happening. Drewitz also never received any shareholder distributions despite his 30 percent ownership. This is due to the contention on the Walser family that Drewitz lost all his shares when he was terminated back in 1998. Around 2006, Jack Walser and Peter Hasselquist took full control of Motorwerks with Walser as a 80 percent shareholder and Hasselquist controlling 20 percent. In 2006, in the midst of appeals and lawsuits with Drewitz, Motorwerks was sold for $21.6 million, including a reported over $17 million that went to Jack Walser. Drewitz received nothing. He had received tender offers from the Walser family for his shares; however, they weren’t in line with the shareholder agreement.

According to court documents, “Upon this third remand, the district court determined that Motorwerks, and not the Walsers, was liable for breaching the shareholder agreement. It found that Motorwerks failed to pay Drewitz $3.9 million in distributions and, after calculating preverdict interest, entered judgment against Motorwerks for $7.9 million July 24, 2013. However that didn’t stick. Following appeal, the district court ruled in favor of the respondents and against Mr. Drewitz. The legal back and forth continued, until June 22, 2015.

A court of appeals finally ruled in favor of John Drewitz and reinstated the order for him be paid $7.8 million for his 30 percent ownership from 1998. The judgment, offered by Judge Carol A. Hooten noted that Jack Walser had purposely drained all corporate funds by distributing shareholder dividends to himself and Peter Hasselquist, which left the company depleted of funds by 2012.