Kruse International, the four-decade-old, Indiana-based auction house that's moved cars like Chitty Chitty Bang Bang, is having a rough time of it. According to the Journal Gazette, lawsuits and actions have been brought against it by states, buyers and sellers – just about every entity an auction business is involved with. It isn't the first time founder Dean Kruse and his company have been in trouble, and Kruse says it's been worse before.
That's probably the best consolation possible, short of being paid back, for the people in line waiting for money. Customers in Indiana alone who haven't been paid for cars they consigned to auction are suing for more than a half-million dollars. Arizona suspended Kruse's license to hold auctions in that state, American Express wants more than $100,000 for unpaid corporate credit card bills, and one bank wants to foreclose on Kruse Auction Park, the company's showcase location for its Labor Day auction where 5,000 cars can go in one weekend. In total, Kruse's legal issues in Indiana alone count for more than $16 million.
According to the JG, Kruse says much of the problem is the way he's worked with regular customers, who would win a car at auction and pay later. Now, he claims he's owed more than $6 million by buyers. He also says he wasn't prepared for the recession, but now he just needs to get some cash flow going and he feels good about doing that. And if he needs to, he still has high-dollar items he can sell like an Auto Union used by the Nazi High Command. It's a familiar business story over the past year, but until things gets addressed, it might be best to remain a buyer as far as Kruse goes – they're the only ones who don't seem to have any complaints.
[Source: Journal Gazette]