Tammy Darvish, the well-known face of DARCARS Automotive Group, is suing her father, John Darvish Sr., and the company he founded, after being left out of the dealership group’s ownership team.
In a 19-page lawsuit filed Friday in a Maryland court, Darvish said that her father reneged on the one-third ownership in the company that he had promised to her. The story was first reported by The Washington Post.
In an emailed statement to Automotive News, Darvish said she is “deeply saddened by these events” and hopes for a “quick resolution to this matter that allows our family to move forward.”
A spokeswoman for John Darvish Sr. said in a statement that family members "had not seen the lawsuit and therefore could not address the allegations."
“They are of course saddened to learn Tammy has taken this route," the statement said. "Mr. Darvish Sr. and his sons had hoped she would continue to represent and advocate for the Darcars brand. They love Tammy and know that the family will work through this difficult time."
DARCARS, of Silver Springs, Md., has 22 dealerships: two in Florida and the rest in Maryland and Virginia. It posted revenue of $1.13 billion in 2013 and ranks No. 31 on Automotive News’ list of the top 125 dealership groups based in the U.S., with retail sales of 20,577 new vehicles in 2013.
Shut out
Darvish started at DARCARS in 1984 and held a variety of management positions over her 30-year tenure at the company.
The lawsuit stated that her father, John Sr., repeatedly promised her during her employment that if she continued at DARCARS, he would provide equal one-third ownership stakes in the company when he retired to her and her two half-brothers from his second marriage: John Darvish Jr. and Jamie Darvish.
The lawsuit contends that John Sr. also said that daily operational decisions would require unanimous consent “so that John Jr. and Jamie would not be able to shut her out.”
“Tammy relied upon her father’s promises, devoted herself to DARCARS,” the lawsuit stated.
Side deal
But after John Sr. made a written succession plan in January 2014 outlining his plan for equal ownership, the court documents said John Jr. and Jamie became “hostile” towards Tammy. The two brothers “demanded” she sign a “side agreement” that would have given the brothers effective control over the company, the lawsuit said. She refused.
Around March 2014, John Jr. and Jamie began pressuring their father, who is near 80, to break his prior promises to Tammy and remove her as executive vice president and take away her operational control, the court document states. On March 10, John Sr. named John Jr. as CEO and Jamie as COO of the company.
“Shortly thereafter, Tammy was asked to clean out her desk and was stripped of her authority and responsibilities as executive vice president,” the lawsuit alleged. “Tammy was also informed that she would not be receiving her promised ownership interest in DARCARS.”
‘Within our family’
Darvish declined a request for an interview.
In her email statement, she wrote: “It is unfortunate that now, more than 30 years after I first started working at DARCARS, my father is not living up to the written and oral commitments he made to me with regard to succession planning. I had hoped this issue could be resolved within our family, but the actions of my father and stepbrothers have left me with no other choice but to pursue legal action.”
Darvish seeks a remedy of her one-third ownership stake in the company as of Jan. 1, 2014, and an order that her father execute a shareholder’s agreement providing for the unanimous consent of all stockholders for decision-making, and an award of damages equal to the value of one-third of DARCARS as of Jan. 1.
High profile
Darvish is a well-known figure in the automotive industry. She was on the board of the National Automobile Dealers Association in 2009. She was also the first woman to chair the Washington Area New Auto Dealers Association in 2008-09. She was listed in Automotive News’ 100 Leading Women in the North American Auto Industry in 2010.
She became particularly visible when dealers fought the termination of franchise agreements during the bankruptcies of General Motors and Chrysler.
Darvish was outraged that the U.S. government had prompted GM and Chrysler to take businesses away from her family and thousands of others during the automakers’ 2009 bankruptcies. She was in the thick of the fight on Capitol Hill when dealers who had their businesses ripped away tried to get them back.
She was a member of the Unsecured Creditors Committee in the Chrysler bankruptcy.
In 2011, she wrote a book called Outraged: How Detroit and the Wall Street Car Czars Killed the American Dream.
In the book, Darvish tells how she searched her soul -- and sought counsel from her father -- before casting a vote in favor of the Fiat-Chrysler deal.
Ryan Beene contributed to this report
