State rep., former business associate spar in court
Posted January 11, 2010 6:02 p.m. EST
Updated January 13, 2010 6:39 a.m. EST
Smithfield, N.C. — Former business partners in Johnston County will face off in state and federal court to determine who is to blame for the failure of an auto dealership.
Security Auto Sales, run by Michael Barefoot, contracted with a financing corporation managed by State Rep. Leo Daughtry.
After the dealership went under, the two men filed suit against each other, disputing the reason for the company's demise.
Daughtry blames Barefoot's poor management for the failure; Barefoot says Daughtry's firm skimmed money off vehicle financing deals and filed fraudulent title claims with the state Division of Motor Vehicles.
Barefoot alleges that the false claims led the DMV to close his dealership in 2007, and Daughtry and other executives had his bank accounts frozen.
Daughtry on Monday denied any wrongdoing.
No criminal charges have been filed in the dispute. A state lawsuit is expected to start this week, a federal racketeering lawsuit is also pending.