[brentfenimore]

Hello to all,

I am posting the attached memo in order to give the AC side of the story on their relationship with Jimmy Price.

I can comfortably say that we (SAI) did not undermine the relationship between the two parties and that Carroll only came into the picture in order to restore an old relationship with a friendly company that needed help.

I do not agree with several of the posts on the general forum concerning the Shelby AC Cobra but do not wish to create a war or hurt any of the parties involved, Price, AC or Shelby.

R Brent Fenimore



Cobra Club Readers.

February 13, 2004

As an introduction, my name is Mike Hall and I am a shareholder of AC Motor Holdings Limited. I am therefore also a partner of Alan Lubinsky.

I have a number of friends who have Cobra’s and who have read the posts on the site, and while I have not read any posts first hand, I understand that there has recently been a number of recent posts about the AC/Jimmy Price situation. I also understand that there are a couple of members who have been pretty personal about Alan Lubinsky.

Just for the record, I have had telephone conversations with your member operating under the MK1V name and I fully backed the decision not to pursue any commercial relationship with him whereby he would represent the AC brand in the USA. From memory, this was about 4 or five years ago.

I have been a partner of AC since the back end of 1997. It has never been my full time occupation. I will also say that there were times a few years back that I clashed with Alan personally over some issues, but I must be very clear that I have always respected his commercial decisions. The business that we are involved in is an extremely difficult business and it is not for the faint hearted, as if it was, there would be many more people that would take the risks that this sector entails. However, a number of people present themselves as being an expert, but in my experience, they have not got a clue on how difficult this business is.

I am also not prepared to make this personal, as I understand that some of the posts are, only to give everybody a frank account of our relationship with Jimmy. Prior to the current situation, we had an excellent relationship and have always respected what and who he is. AC did have a commercial relationship with Jimmy on the Ace that we inherited, and that program was not viable to both Jimmy and AC. During 2001, AC was having a difficult time as the extremely high costs in the UK made it very difficult to make something commercial. We wanted to increase volume and reduce cost and it was clear to us that the UK was not the place to do that in. We wanted to keep, if possible, a smaller operation in the UK for aluminum cars, but even that was in question. However, AC has an important British heritage and history, and we decided to try and accommodate this in another form.

We always had a relationship with Jimmy, and at the time, had even asked him to consider building composite Cobra’s that could be sold under the AC brand. We always believed that a $40,000 Cobra would be viable. We could never move forward on that as Jimmy was not happy to do that as it probably would have hurt his own product sales. Obviously, it was his decision, which he was entitled to.

He then approached us and said that he would like to operate our Frimley factory and build the aluminum cars under license. We were in favour of that and discussions were entered into. A number of issues were discussed that would make this viable, including the fact that he was making a lot of the components in South Africa anyway, and more so, we were more than happy to discuss that his dealers in the USA could sell the AC product. It was always made very clear that he would not acquire any of our assets, including jigs. He would have the use of them. He took over from August 1, 2002 and we were in discussions on a draft contract. The discussions also included that the lease on the facility be taken over. There was also some work in process.

Already in January 2003 we were finding out that there were financial problems at his company, Private Corporation Limited. (“PVT”). We then heard that the Superformance dealers had no intention of taking the cars. This had to be an extremely negative impact on the business of PVT and in addition, to AC, as the likelihood of income streams on Royalties became increasingly more worrying. We are also aware that a customer of AC advanced PVT a significant amount of money, which he understood to be guaranteed by Jimmy. This was denied when the customer went to have his funds returned after the factory was closed. We also were made aware by the landlord of the facility that they were struggling to get the lease taken over by PVT. We wrote a number of letters to PVT asking them to advise us how they intended moving forward, but those remain unanswered. It was also confirmed to us that no parts were being sent from South Africa for the production.

There were other desperate measures been taken at the factory. We were also hearing that there were discussions going on that could see some new people trying to get involved in selling in the USA. We made it very clear to PVT that this would not be acceptable unless there was a full business plan presented and approved by us. This was ignored. We decided that as we were now aware that many creditors were in arrears, including Payroll Taxes, we needed to try and move forward in another direction as many of the liabilities were still AC’s as PVT had not taken over the lease etc.

We are aware that there were numerous correspondences suggesting that AC was owned by Jimmy. While we do not really care what people say, we would not accept any harm to the AC brand. All the partners of AC have significant money invested in the AC brand and we will protect it as we see fit. Although there was a requirement for all marketing and advertising material to be cleared by us, this was also ignored and the quality and desperation of the advertising could be seen in adverts placed in Autoweek during September 2003.

Jimmy Price then approached Alan by telephone and asked (demanded) that he gets the AC brand to put on fiber glass cars to be built in South Africa. He confirmed that he had potential dealers in the USA that would give the factory a deposit for cars but they were not prepared to unless they got fiber glass cars in additional to the aluminum cars. Again, he was asked to provide a business plan, but this was refused in no uncertain terms.

It was then decided by AC that we would look at other opportunities as clearly, the situation with PVT was perilous.

Since then, there have been certain announcements about a relationship formed with Carroll Shelby. We are exceptionally proud to be involved in this as this is the best thing possible for the two brands.

As mentioned before, the partners of AC have invested significant funds in the AC brand, and the same goes for Shelby. It seems that a number of parties feel that they can hijack as they have been making imitations and as such have operated off the back of these two brands and are somehow getting confused and feel that it is theirs.

It is also strange that Jimmy only wanted to have an AC brand on a glass car when Shelby announced the 4000 series.

To finish this story, it is true that Jimmy was very upset when he heard that AC had done a deal with Shelby. To try and upset the issue, he did go to London and fire everybody. He decided to put himself first, and not worry about people who had jobs. However, these bulling tactics did not work as despite how anybody feels about AC or indeed Alan, I was very thankful that Alan had protected AC which meant, like the other shareholders in AC, my investment is still safe.

PVT went bankrupt in October 2003. Under the management of Mr Price, it had completed three cars in fourteen months, all of which had been in progress when he took over. It is public record that it was about six months in arrears with Payroll Taxes when it was shutdown. I know that it has been suggested that it was closed because of the deal with Shelby, but the facts are different. The financial records also suggest otherwise.

These are the only comments that we are going to make. I have said that nothing is personal. We wish Jimmy well.

From our part, we look forward to announcing further news in the next few weeks, despite what some of your posts suggest.

We also look extremely forward to a long relationship with the Shelby organization, and indeed Carroll himself, as for the first time ever, the “Real Thing” will be available over a spectrum of product.

Sincerely yours,

Mike Hall.