Double A – M – C, (uh Oh)!
Hundreds of AAMCO franchisees want AAMCO held liable for fraud.
The Law Office of Jonathan E. Fortman, LLC, announced on November 22, 2013 that it has filed suit against AAMCO Transmission and its parent companies on behalf of several current and former franchisees. Plaintiffs seek to have the case certified as a class action. The lawsuit, filed in the United States District Court for the Southern District of Illinois, seeks damages for the franchisees for violations by the Defendants of the Racketeer Influenced Corrupt Organization (RICO) Act.
According to Jonathan E. Fortman, lead counsel for the Plaintiffs, “The AAMCO system has engaged in pervasive and blatant fraud against its current and former franchisees for years but has been able to avoid scrutiny through intimidation and bullying of their franchisees.” Fortman says, “The vast majority of the franchisees are good, decent people who learn only after investing thousands of dollars that to be successful in the AAMCO system they must be willing to engage in predatory and fraudulent practices against the consumers. When they refuse to do so, they fail and AAMCO simply sells their locations to other unsuspecting investors. It is a cycle we intend to stop through this action.”
The transmission franchise company was founded in 1963 by Robert Morgan and has since grown astronomically. In 1992, Robert’s son, Keith Morgan, took over the company as CEO. In 2005, Robert Morgan passed away. The Morgan family sold the company in March of 2006 to American Capital which already owned their then longtime rival Cottman Transmission. According to Fortman, “When American Capital paid over $100 million to buy AAMCO, the existing franchisees thought the system would change and they would get the support that had been lacking for years. Instead, it got worse. American Capital basically raided the company to such an extent that it is now insolvent.” Over the course of several years, franchisees have been complaining to their franchisor and their supposed advocate, NADA (the National AAMCO Dealers Association), about their many issues but nothing has changed. All of these issues are highlighted in the lawsuit which may be downloaded in full by clicking the links below.
Fortman stated, “During our investigation we interviewed hundreds of franchisees. The general consensus among franchisees is that the AAMCO system is a complete and total failure. The franchisees can no longer afford to wait for AAMCO to voluntarily make needed changes while thousands of honest franchisees face financial devastation. It is time the public, potential victims, and those already injured by this fraudulent system learn the truth.”
Click link below to download entire AAMCO lawsuit and the accompanying exhibits.