By ERIC C. RODENBERG
AntiqueWeek Associate Editor AUBURN, Ind. — When auctioneer Dean Kruse and his company, Kruse, Inc., were stripped of their auctioneers’ licenses in May, the future of Kruse’s internationally famous Labor Day car auction was in doubt.
But, the auction, which is in its 40th year, will go on, albeit under the direction of new owner, RM Auctions of Canada.
The auction is not only a highlight among classic car collectors, but also for this community of 13,000 people.
RM Auctions, an international powerhouse within the world of automotive auctions, is buying the 235-acre auction park from Kruse with the intention of “re-branding” the event as Auctions America, operating it as an RM subsidiary. This year’s auction is scheduled for Sept. 2-6 and the new owners hope to consign close to 1,500 classic cars to the event.
RM officials emphasized that Kruse has no “legal or financial” interest in the new auction house.
On May 25, the Indiana Auctioneer Commission suspended Kruse’s auctioneer license and fined him $35,000, while chastising him for poor business practices that have left dozens of unpaid consignors. The Commission also revoked the auctioneer license issued to Kruse, Inc. and fined the company, owned solely by Dean Kruse, another $35,000. It was one of the harshest actions ever meted out by the Commission.
Submitting documents before the Commission, the Indiana Attorney General’s office accused Kruse of not paying about 70 consignors more than $300,000 during the past two years. Kruse told the commission he had been releasing vehicles to trusted customers before receiving full payment. He said he had been stiffed for around $6.7 million.
Kruse, a member of the Indiana Auctioneer Assoc. Hall of Fame, also has several lawsuits pending against him in DeKalb County, Ind., and other states.
Officials would not comment on any of the specifics of the deal, with RM representatives reiterating that the sale was for the park only. RM Auctions has been in negotiations with Kruse during the past “two to three weeks,” said Ed Cepuran, CFO of Auctions America. During that period of time, Cepuran said he had spent considerable time looking at Kruse’s operation. And, he came to many conclusions.
“He (Kruse) received a series of bad advice over the past couple of years, and he acted on that advice,” Cepuran said.
In taking over the auction park, Cepuran said RM Auctions plans on establishing client trust accounts and implementing “accelerated” pay processes for buyers and sellers.
“We have to restore some integrity and confidence back into this company,” Cepuran said. He said the company is looking at setting up a “five-day period,” in which the consignor will be paid after RM receives its money.
“Dean Kruse has been our biggest competitor through the years,” said Rob Myers, founder of RM Auctions during a July 1 press conference at the Auburn Cord Duesenberg Museum in Auburn, in regards to why the firm was interested in buying the auction park. “We have had some all-out wars … this was an opportunity we just couldn’t pass up.”
RM Auctions did more than $200 million in sales last year, having conducted auctions in Monaco, London, Italy and several locations throughout the United States.
With RM Auctions emphasizing the company in no way assumes any of Kruse’s liability, Kruse publicly stated at the press conference he intends to make good on money still owed to consignors.
“I asked Obama for aid and I didn’t get any help; I guess I wasn’t big enough,” Kruse quipped. But, “I’ll fight my own war and my own battles. I carry around with me a list of the 62 consignors I have left to pay. Each time, I pay one I write them off … the state of Indiana has given me three years to pay off these consignors. I want to pay them quicker.”
The 68-year-old Kruse said he had no plans of retiring. He inferred that he will continue buying and selling classic cars.
“I want to die working,” he said. “The longer I work the better for me. I’m not about to fade away into the sunset.”
He said, if called upon, he is willing to help the new American Auctions become a success.
In buying the Kruse Park, RM Auctions is venturing into new territory, according to founder and owner Myers. Since entering the auction business in 1991, Myers described his business as more of a “boutique;” a business focused more on exclusivity and quality, rather than sheer numbers.
“We haven’t usually done a large volume,” he said, “something around 175 cars. Like Monaco last year, where we had only about 100 cars, but with a sales volume of $52 million.”
Myers said this move with American Auctions “more into the mainstream” of the automotive market was a “natural fit” for the company’s expansion.”
Plans currently are to start out with at least two American Auctions a year – a spring and fall event – while looking at other opportunities for expansion. Myers said the company also plans on leasing the park to other organizations for large exhibits, auctions and other events.
“We going to put a lot of money into this park,” he pledged. “We’re going to do a lot of updating, painting, installation of computer services, and more. Our goal is to make this the largest auction in the world over the next couple years.”
For more information, call 519-437-3053 or go online to visit www.rmauctions.com |
