PrimaLend faces second lawsuit over sale of failing BHPH portfolio

Buy here, pay here dealership Simple Auto is suing bankrupt lender PrimaLend Capital Partners , saying it pressured Simple Auto into buying a failing auto group, resulting in $18 million in losses. Simple Auto’s complaint, filed June 10, says PrimaLend convinced the Dallas-based buy here, pay here (BHPH) retailer to purchase a distressed dealership group with a portfolio 230 times its size by misrepresenting the portfolio’s health, according to U.S. Bankruptcy Court of the Northern District of Texas Fort Worth Division records. The complaint says PrimaLend pressured the sale and withheld information to avoid writing off $10 million in debt that the distressed dealership, Adonis Auto Group, owed it. “To delay the recognition of this loss, PrimaLend needed that portfolio to sell at a heavily overvalued price and needed to collect an inflated commission from that sale. As such, PrimaLend had a vested, selfish interest in securing a buyer,” according to the complaint. PrimaLend filed Chapter 11 bankruptcy on Oct. 22, 2025 , citing slowing auto sales to customers with poor credit. The Plano, Texas-based lender provided financing to BHPH retailers focused on subprime consumers, according to court records. The complaint Per the complaint, Arlington, Texas-based dealership Adonis Auto Group was set to foreclose by June 14, 2024, after owing $29 million in debt to lender Sunflower Bank and $10 million to PrimaLend’s floorplan lending subsidiary, Good Floor Loans . Adonis was said to have 250 repossessed vehicles and 2,600 consumer auto loans for sale with total outstandings of $46 million, according to the complaint. Simple Auto learned about the sale and reached out to PrimaLend’s Chief Operating Officer Paxton Wright for advice on June 11, 2024, according to court records. Simple Auto, which had four employees and had originated 35 auto loans since its February 2023 founding, had previously worked with PrimaLend. The next day, PrimaLend became an adviser for Simple Auto, according to the complaint, and: Charged Simple Auto a $950,000 advisory fee, which the complaint says was illegal as PrimaLend was not a licensed investment adviser; Encouraged Simple Auto to purchase the $46 million outstanding portfolio despite knowing Simple Auto lacked the staff and infrastructure to manage it; Provided Simple Auto data showing 90% of Adonis’ borrowers were within 30 days of staying current without disclosing that percentage came from Adonis’ policy of freely extending due dates for loans; Did not disclose or was unaware that Adonis’ GPS information showed several vehicles for repossession were in other countries and difficult to recover; Did not disclose or was unaware that several estimates for the repossessed vehicles were overvalued despite having access to Adonis’ data; and Did not disclose or was unaware that charged-off, repossessed vehicles were not removed from Adonis’ borrowing base, inflating the value of its total outstandings. The Simple Auto lawsuit seeks at least $18 million in damages and has an initial hearing set for Nov. 24, according to court records. The complaint echoes a lawsuit by subprime lender Prime Asset filed Jan. 7 against PrimaLend and its Chief Executive Mark Jensen , which said PrimaLend engaged in a pattern of forcing lenders to purchase its failing dealership portfolios in “self-harming transactions” to avoid PrimaLend taking any losses. Jensen did not respond to requests for comment. However, when asked in October 2025 whether PrimaLend would sell non-performing dealerships to performing dealer partners for inexpensive prices, Jensen told Auto Finance News: “As is the case with any commercial lender, PrimaLend has various processes to ‘work out’ non-performing loans with its borrowers. Any such ‘work outs’ are confidential information between PrimaLend and the dealer-borrower(s) involved.” The January lawsuit, which seeks at least $45 million in damages, has a hearing scheduled for June 25, according to court records. Auto Finance Summit, the premier industry event for auto lending and leasing, returns October 5-7 at Caesars Las Vegas. To learn more about the 2026 event and register for early-bird pricing through Aug. 21, visit www.AutoFinance.live/AFS .

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