Pro stock driver Vieri “V” Gaines at Bandimere Speedway in 2016. (Denver Post file photo)
A busted sale of four motorsport manufacturers for $13 million is grinding the buyer’s gears.
Western Distributing Co., at 4955 Bannock St. in Denver’s Globeville neighborhood, got its start in 1933 when an Italian immigrant and shoemaker named Guido Mapelli picked up Coors beer in Golden and sold it on the streets of downtown Denver. The family company is now run by Mapelli’s grandson, Vieri Gaines, and operates in a wide variety of industries, including auto parts.
Mikey Sasina knows about family businesses. He took over Metro Pavers Inc. from his father and grew it into MPI Cos., which includes a trucking company and asphalt milling business. And like Gaines, a retired National Hot Rod Association driver, Sasina enjoys drag racing.
In May, Gaines and Sasina met in north Denver to discuss a possible sale of four Western Distributing subsidiaries: GRP Connecting Rods, Gibtec Pistons, Western Motorsports R&D and Winberg Crankshafts, Sasina recalled in an Oct. 2 lawsuit. Gaines wanted to sell quickly, purportedly because his wife was ailing and he wanted to spend more time with her.
Mikey Sasina (LinkedIn)
Over a meal at The Ranch at West 40 in Lakewood, Gaines reportedly told Sasina that he was the right person to move the companies forward, that the companies’ machines were in good working order, and that there was enough inventory to operate for a year without buying materials.
“He will be making money on day 1,” Gaines emailed a business associate, Sasina says.
But when Sasina asked for three years of company financials, Gaines reportedly balked.
“This is my Achilles heel, as my past 3 years’ financials are a mess and not representative of the operations as we were cycling thru a 1+ million dollar theft (Winberg) and a rogue retiring CFO,” Gaines emailed Sasina on May 27, according to the lawsuit. “I am confident that the 4 months for this year are good indicators of the profit abilities of the operation.”
There were other signs the transition would not go well. When Sasina met with the companies’ leadership teams, the general manager of GRP Connecting Rods demanded $1 million for the work he had done, then quit. His wife, the company bookkeeper, quit the next week.
Still, Sasina agreed to buy the four companies for $13 million: $6 million down and $7 million more in July. He made the first payment and Gaines handed over the businesses June 1.
Former Lakewood pro stock driver Vieri “V” Gaines signs autographs for a couple of young fans in 2016. (Denver Post file photo)
“The transition was anything but seamless,” according to this month’s lawsuit. “It quickly became apparent that despite portraying himself as being involved and knowledgeable about day-to-day operations, Mr. Gaines had no such knowledge and involvement.”
Six machines were already broken and another crashed on day 1. And rather than have enough material to last a year, Sasina had to buy inventory in the first three weeks, he says. Then, the CEO and chief financial officer at GRP, the most successful of the companies, quit.
“The companies did not start generating revenue right away. To the contrary, (Sasina) quickly realized that three of the four units would generate losses,” according to his lawsuit.
When Sasina couldn’t make the second, $7 million payment, he and Gaines decided their deal wasn’t working out and they mutually agreed to rescind it. That happened July 20. But when Sasina asked for his $6 million back in August, Gaines declined to return it, Sasina says.
“(Sasina) paid $6 million for a business that he controlled for less than two months, and which generated business losses rather than the gains that were promised,” he alleges.
“Mr. Gaines must have been aware … of the poor financial state of Western Distributing, yet rushed a sale in order to conceal WDC’s true financial state,” according to Sasina.
Sasina is suing Gaines for fraud, breach of contract, unjust enrichment and promissory estoppel. His lawyers are Adrian Castro and Krista Tushar at Fairfield and Woods.
Through a spokesman, Western Distributing declined to comment on the lawsuit.
Pro stock driver Vieri “V” Gaines at Bandimere Speedway in 2016. (Denver Post file photo)
A busted sale of four motorsport manufacturers for $13 million is grinding the buyer’s gears.
Western Distributing Co., at 4955 Bannock St. in Denver’s Globeville neighborhood, got its start in 1933 when an Italian immigrant and shoemaker named Guido Mapelli picked up Coors beer in Golden and sold it on the streets of downtown Denver. The family company is now run by Mapelli’s grandson, Vieri Gaines, and operates in a wide variety of industries, including auto parts.
Mikey Sasina knows about family businesses. He took over Metro Pavers Inc. from his father and grew it into MPI Cos., which includes a trucking company and asphalt milling business. And like Gaines, a retired National Hot Rod Association driver, Sasina enjoys drag racing.
In May, Gaines and Sasina met in north Denver to discuss a possible sale of four Western Distributing subsidiaries: GRP Connecting Rods, Gibtec Pistons, Western Motorsports R&D and Winberg Crankshafts, Sasina recalled in an Oct. 2 lawsuit. Gaines wanted to sell quickly, purportedly because his wife was ailing and he wanted to spend more time with her.
Mikey Sasina (LinkedIn)
Over a meal at The Ranch at West 40 in Lakewood, Gaines reportedly told Sasina that he was the right person to move the companies forward, that the companies’ machines were in good working order, and that there was enough inventory to operate for a year without buying materials.
“He will be making money on day 1,” Gaines emailed a business associate, Sasina says.
But when Sasina asked for three years of company financials, Gaines reportedly balked.
“This is my Achilles heel, as my past 3 years’ financials are a mess and not representative of the operations as we were cycling thru a 1+ million dollar theft (Winberg) and a rogue retiring CFO,” Gaines emailed Sasina on May 27, according to the lawsuit. “I am confident that the 4 months for this year are good indicators of the profit abilities of the operation.”
There were other signs the transition would not go well. When Sasina met with the companies’ leadership teams, the general manager of GRP Connecting Rods demanded $1 million for the work he had done, then quit. His wife, the company bookkeeper, quit the next week.
Still, Sasina agreed to buy the four companies for $13 million: $6 million down and $7 million more in July. He made the first payment and Gaines handed over the businesses June 1.
Former Lakewood pro stock driver Vieri “V” Gaines signs autographs for a couple of young fans in 2016. (Denver Post file photo)
“The transition was anything but seamless,” according to this month’s lawsuit. “It quickly became apparent that despite portraying himself as being involved and knowledgeable about day-to-day operations, Mr. Gaines had no such knowledge and involvement.”
Six machines were already broken and another crashed on day 1. And rather than have enough material to last a year, Sasina had to buy inventory in the first three weeks, he says. Then, the CEO and chief financial officer at GRP, the most successful of the companies, quit.
“The companies did not start generating revenue right away. To the contrary, (Sasina) quickly realized that three of the four units would generate losses,” according to his lawsuit.
When Sasina couldn’t make the second, $7 million payment, he and Gaines decided their deal wasn’t working out and they mutually agreed to rescind it. That happened July 20. But when Sasina asked for his $6 million back in August, Gaines declined to return it, Sasina says.
“(Sasina) paid $6 million for a business that he controlled for less than two months, and which generated business losses rather than the gains that were promised,” he alleges.
“Mr. Gaines must have been aware … of the poor financial state of Western Distributing, yet rushed a sale in order to conceal WDC’s true financial state,” according to Sasina.
Sasina is suing Gaines for fraud, breach of contract, unjust enrichment and promissory estoppel. His lawyers are Adrian Castro and Krista Tushar at Fairfield and Woods.
Through a spokesman, Western Distributing declined to comment on the lawsuit.
