Kruse International’s auction license revoked

INDIANAPOLIS (AP and ACNI) – The classic car auction house Kruse International has lost its license after a hearing held yesterday before the Indiana Auctioneer Commission. The commission also suspended owner Dean Kruse’s personal auctioneer’s license for two years.

The commission, which is part of the Indiana Professional Licensing Agency, rejected a settlement proposed by the Indiana attorney general’s office, which would have resulted in a six- to nine-month license revocation, saying it didn’t come down hard enough on Kruse and his company.

The auction house has faced lawsuits saying it violated business agreements with at least 70 people who said they had not been paid for vehicles they consigned to auctions produced by Kruse in 2008 and 2009.

Dean Kruse claimed that all but eight or ten of the consignors in question were paid, although late, and that the actual amount still outstanding is only about $320,000.

Auburn-based Kruse International said the recession hurt his sales and that his company’s cash flow had been impacted by auction buyers who failed to pay for purchases totaling some $7 million. Kruse said he made “poor judgments” on customers and trusted buyers to pay him because of their long history of doing business with his company, some going back 30 years.

Kruse said he had mortgaged his home for $4.5 million and sold personal assets in an attempt to cover auction proceeds owed to his consignors.

Seven years must pass before the business entity Kruse International can apply for a new license. Following the two-year suspension of his personal auctioneer’s license, Dean Kruse will be on probation for three years. He agrees to pay a $35,000 fine within the next 27 months and repay all unpaid consignors within 18 months of regaining his license. Kruse will have to submit quarterly reports through a certified public accountant to report the updated status of monies owed to consignors. By accepting these terms, Kruse avoids permanent revocation of his license.

Kruse International was known as one of the world’s leading collector car auction houses. It was founded in Auburn, Indiana in 1952 by Russell Kruse after his graduation from the Reppert School of Auctioneering. The company began as a local auction company selling real estate, farms and personal property. Russell Kruse, along with his sons Dean, Dennis and Daniel Kruse, held their first collector car auction in Auburn on Labor Day in 1971. After the success of this auction, they were asked by Tom Barrett to conduct a sale in Scottsdale, Arizona, which was the first of the annual sales held there.

In addition to collector cars, the company has auctioned vintage aircraft, collectible tractors, factories, islands, zoos, railroads and three entire towns. The Kruses were the first to sell a car for a documented $1 million in cash – a 1934 Duesenberg Model SJ La Grande long-wheelbase dual-cowl phaeton. The Duesenberg was sold to Tom Monaghan, founder of Domino’s Pizza and then owner of the Detroit Tigers.

The Kruse family is also noted for conducting the $41 million sellout of the fabled William F. Harrah automotive collection. The sale of this 1,000-car collection was dispersed over three auction sessions in 1985, 1986 and 1987. Because of the lucrative divisions that auctioned real estate and oil field equipment, ITT bought Kruse International in 1981, but the family bought it back in 1986. It was purchased in 1999 by online auctioneer eBay with Billpoint for $275 million. The company was purchased back from eBay by Dean Kruse in 2002.

Auction Central News International contributed to this report.

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