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Rent-A-Wreck, family owners struggle through legal disputes

Daily Record, The (Baltimore), Sep 3, 2004 by Robyn Lamb

Rent-A-Wreck's rental cars are cheap and sometimes dated - but they are never wrecks.

It seems the term wreck - judging by court documents that came to light after the company's president was indicted on charges of first- degree assault with a handgun - more aptly describes the Baltimore- area family that controls the multimillion-dollar company.

Behind a company that some franchisees accuse of wielding an uneven, controlling hand is a family with a dramatic history involving guns, murder, brutal custody and divorce cases, alcohol, and domestic problems.

It started innocuously enough. The Blum family, which calls Baltimore County home, took over management of the California-based Bundy American Corp. in 1993, when the company moved from Los Angeles.

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Rent-A-Wreck was originally founded in the early 1970s as Bundy Very Used Cars by Los Angeles entrepreneur Dave Schwartz, whose stepson, Jordan Chandler, sued Michael Jackson on charges of sexual molestation and settled out of court in 1994.

According to Rent-a-Wreck's Web site, the business exploded quickly after Schwartz began renting low-profile cars to actors like Henry Fonda who were looking to travel incognito.

The first Rent-A-Wreck franchise was sold in 1978.

At the time the Blums took over management, Rent-A-Wreck was about 250 franchises strong - a little fish in a car-rental pond controlled by the likes of household names Hertz and Avis.

But filling the niche of a low-cost alternative to the major companies, Chief Executive Officer Kenneth Blum Sr. and his son and President Kenneth Blum Jr. cut costs and launched aggressive expansion plans, awarding new franchises around the country and in Europe.

Three years after they were brought in, the company's operations emerged from $400,000 in the red to nearly $500,000 in the black. The business grew from about 250 to about 650 locations, with sales going from $4.7 million in 1998 to $7 million in 2002.

But with the growth came a dark side.

In lawsuits, franchisees say Bundy American Corp. - the business that manages Rent-A-Wreck -forced some of them out of business through harassment and fabricated audits. Bundy would go as far as soliciting business to directly compete with franchisees in an attempt to control lucrative territory, the documents alleged.

From New York to Florida and in Maryland, a handful of lawsuits have been filed against Bundy, alleging abuse of the franchise contracts.

In a Maryland case, Bundy allegedly audited an Owings Mills-area franchise owned by Cliff Blake and, claiming he underreported earnings, coerced him into giving up his business. Bundy already had found a prospect to take over the area, according to court documents.

It appears the audit has been used repeatedly by Bundy as a weapon against any franchisee who steps out of line, warned Donald Rea, a Gordon, Feinblatt, Rothman, Hoffberger & Hollander LLC lawyer who represented Carney franchise owners Martin and Sandra Carter, in a December 2001 letter to other area franchises. Indeed, Bundy regularly uses its audit powers as a hammer to attempt to coerce franchisees into giving up valuable territorial rights.

Within the company, former employees say the Blums used the company to buy cars for personal use to avoid sales taxes, staffed their own businesses with corporate employees and rented out vehicles to girlfriends with no payment in return.

More startling, however, is the melodrama that played out between the Blums.

Drinking to escape

When Bundy President Kenneth Blum Jr. was being served with a court subpoena in July, he allegedly threatened Ryan Smith, who was serving the papers, with a handgun.

After Baltimore County police found several other handguns in Blum's Owings Mills home, he was indicted on charges of use of a handgun in the commission of a felony and use of a handgun in the commission of a crime of violence.

In 2003 state Handgun Permit Review Board records, testimony states Blum needed the guns due to the threats received from disgruntled employees and because of threats received from brother- in-law Bill Bond.

Bond married Blum Jr.'s sister, Alyson Slavin. At the age of 17, Bond admitted to murdering his father in 1981 with a hammer. He then spent four years at Sheppard Pratt Hospital in Towson.

Several years later Bond wrote a manuscript, Self Portrait of a Patricide: How I Got Away with Murder, a fictionalized account of the events around his father's death, his prosecution and time at Sheppard Pratt.

Bundy Chairman Kenneth Blum Sr. used the manuscript in a court case involving his daughter. Bond, claiming copyright laws had been infringed upon, sued Blum Sr.

Since then Bond has filed a series of suits against the Blums.

The legal back and forth led up to the scene at Blum Jr.'s Owings Mill home in July in which he was being served a subpoena to appear in court to answer questions about a suit Bond had filed.

But the indictment that followed for Blum Jr. was not the first indication of gun use - or violence, for that matter.

Rent-A-Wreck, family owners struggle through legal disputes

Daily Record, The (Baltimore), Sep 3, 2004 by Robyn Lamb

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