Subaru’s New England distributor “unreasonably withheld consent of the sale” of Prime Subaru Manchester to Group 1 Automotive Inc. last year, New Hampshire’s Motor Vehicle Industry Board has ruled.

The fate of the store — the lone dealership left in the once-sprawling Prime Automotive Group owned by troubled alternative asset management firm GPB Capital Holdings — has been in limbo for nearly a year. Despite the board’s Aug. 12 ruling, a conclusion doesn’t appear imminent. Distributor Subaru of New England, which is blocking the sale over what it calls poor performance by Group 1 at another Subaru dealership, plans to appeal the decision. Most of Prime’s dealerships were sold to Group 1 last November.

In the order siding with Prime Subaru, the board wrote it believes Subaru of New England “preferred another buyer for Prime” over Group 1, rejecting the distributor’s rationale that an existing Group 1-owned Subaru store, Ira Subaru in Danvers, Mass., was the “worst of the worst” of its dealerships in service performance. The board also denied a counterprotest by Subaru of New England.

Subaru of New England indicated it will appeal the board’s decision, first through a rehearing to the motor vehicle board, which means it may be some time before a final determination is made as to whether Group 1 can acquire Prime Subaru Manchester. GPB Automotive Portfolio limited partnership, a holding company, will continue to operate the dealership for now, the partnership said in an August regulatory filing.

“We are extremely disappointed in the New Hampshire Motor Vehicle Industry Board’s decision,” Bryan Dumais, vice president of market development for Subaru of New England, said in a statement.

“It violates Subaru of New England’s rights under state law and our dealer agreement,” he added. “It is unreasonable to force anyone into a personal services relationship with a poor performer that has let you down in the past. The board made fundamental errors of law on both the protest and counterprotest and conducted an unfair hearing that we will give it the opportunity to correct through an application for rehearing. Subaru of New England will act to protect our rights under the statutory process and further proceedings in court if necessary.”

The New Hampshire Department of Safety said a motion for a rehearing was filed Thursday, Sept. 1.

According to the board’s order, Subaru of New England cited poor performance at Group 1’s Ira Subaru as a reason for blocking the Prime Subaru sale. Subaru of New England also provided two prospective buyers for Ira Subaru after Group 1 offered to sell the store to acquire Prime Subaru, the board wrote. That sale ultimately did not happen.

Pete DeLongchamps, Group 1’s senior vice president of manufacturer relations, financial services and public affairs, said via email that the publicly traded auto retailer is “pleased with the outcome” but declined to comment on the distributor’s criticism of Ira Subaru or on what may be coming next.

A spokesman for GPB Capital Holdings declined to comment on the board’s ruling.

Automakers and distributors generally have the right to decline a proposed buyer in a dealership transaction and instead select a buyer of their own choosing, but they must keep the terms of the deal the same.

“While [Subaru of New England] had a right to pick its franchisee, it could not reject a qualified franchisee, Group 1, either, unless it had sufficient legal reason for doing so,” the board wrote. “In this case, it did not.”

The dispute dates to September 2021 when Prime asked Subaru of New England to sign off on a proposed sale of the Manchester dealership to Group 1.

Jeffrey Ruble, now COO of Subaru of New England, told Daryl Kenningham, now Group 1’s president and COO, that Subaru of New England was “not excited” about the proposed sale due to ongoing problems at Ira Subaru,” according to the board’s order. Problems were said to include low customer satisfaction and net promoter scores in 2021, as well as employee and management turnover.

Subaru of New England called Ira Subaru “the ‘worst of the worst’ in service of its 64 dealers” and said customers left poor reviews about such things as service delays and communication, according to the order.

Prime Subaru Manchester filed a protest in December with the board, contending that Subaru of New England did not say why it rejected the sale to Group 1 nor did it exercise its right of first refusal within the contractually required timeline.

Group 1’s Kenningham proposed selling Ira Subaru to acquire Prime Subaru, the board wrote.

Subaru of New England offered one prospective buyer for Ira Subaru, according to the board — New England dealer David Rosenberg, former Prime Automotive Group CEO who started DSR Motor Group after GPB fired him in 2019. The board’s order said that Rosenberg offered $6 million for Ira Subaru, but Group 1 — which valued the store at $20 million — rejected the offer.

Reached by phone, Rosenberg confirmed he made an offer for Ira Subaru but said the price quoted in the order was inaccurate and that his offer was “significantly higher” than $6 million. He declined to disclose the bid amount.

The New Hampshire board’s order said Subaru of New England then presented a $10 million offer from “the Kelly dealership group,” which Group 1 also rejected. The decision does not reference the full name of the Kelly group. The board’s chairman declined to provide additional detail, citing the ongoing case.

That Subaru of New England “would have allowed Group 1 to purchase Prime if it sold Ira Subaru supports the conclusion that Ira’s [customer service] and [net promoter] scores did not make Group 1 ineligible to purchase Prime,” the board wrote. “Moreover, while SNE portrayed Ira Subaru as the ‘worst of the worst’ in customer service satisfaction and in its service department performance, there is no evidence that it ever had sufficient legal basis to terminate it as a dealer. Therefore, its low CSI scores were not the primary reason for withholding consent for the sale.”

This isn’t the first time Group 1 has been blocked by an automaker from acquiring stores. In 2010, Toyota sued Group 1 to prevent the retailer’s acquisition of two Toyota and Lexus dealerships in South Carolina. The dealerships later were sold to Hendrick Automotive Group.

Melissa Burden contributed to this report.