Portman Lamborghini, Ltd. (Portman) was owned by Chaplake Holdings, Ltd., a United Kingdom company, which was owned by David Jolliffe and David Lakeman as equal shareholders. Between 1984 and 1987 Portman sold approximately 30 new Lamborghinis each year through its exclusive concession contract with the car maker. It was then the largest Lamborghini dealer in the world, since Lamborghini’s production was just 250 cars per year. These cars sold at a retail price between $200,000 and $300,000. In 1987, Chrysler Corporation bought Lamborghini; and its chairman, Lee Iacocca presented plans to escalate production to 5,000 units within five years. The plan included the introduction of a new model, the P140 with a retail price of $70,000. Between 1987 and 1991, all of the Chrysler/Lamborghini top executives with whom Jolliffe and Lakeman and their top advisors came in contact with provided the same message to them – Chrysler was committed to the Expansion Plan, and in order for Portman to retain its exclusive UK market, it must expand its operational capacity from 35 cars in 1987 to 400 cars by 1992. Accordingly, Portman acquired additional financing, staff and facilities and built a new distribution center. An economic downturn in the US and major development and production problems at Lamborghini led Chrysler to reduce its expansion investment by two-thirds. Factory production delays eroded Portman’s profitability and success; and it entered into receivership in April of 1992. Suit was brought on behalf of the Portman and Chaplake entities on a promissory estoppel theory against Chrysler, a Delaware Corporation. Should promissory estoppel be enforced here, if so or not why?
