Dean Kruse tells his side of the story.
- By Phil Skinner
Just a few years ago, Dean Kruse was at the apex of the collector-car auction world. He had been heralded as a genius in the sale of his Indiana-based Kruse International auction company to online auction giant eBay for a total that some reports put in excess of $150 million. He later repurchased the company for less than a dime on the dollar. Through skill and careful positioning, he was able to assemble a top-shelf crew of auctioneers, many of whom were relatives, and a savvy staff. Many of today's most successful auction operations in the world of vintage cars owe a portion of their success to the pioneering in-roads of Dean Kruse.
But fortunes began to change for Kruse in 2007 with a marked shift in the economy. By his own admission, Kruse was blind-sided by the depth of the comtry's economic spiral. There had been customers, he said, whom he had trusted to make payment on cars bought at auction - a business practice of Kruse for many years. Kruse explained it wasn't uncommon for a dealer to buy several cars at one of his auctions and for Kruse to front the dealer money, expecting the cars would be re-sold soon or the dealer would pay the bill within a few days. He said as the economy worsened, outstanding debts mounted and he wasn't able to pay owners of cars he sold.
Kruse said he hoped the economy would turn, but as stories of non-payment circulated, customer confidence waned. His company was soon besieged by creditors. By the end of 2009, the writing was on the wall and in late June 2010, Kruse negotiated the sale of Kruse Auction Park to RM Auctions, which renamed the property the Auburn Auction Park and launched Auctions America, an entirely new auction company.
At the time of the property sale, Kruse said he was happy RM Auctions purchased the property and would continue with the Labor Day weekend tradition started in 1971. Kruse also acknowledged his outstanding debt with a list 67 people to whom he owed money. At that time, he vowed he would not declare bankruptcy and would work to pay off each person.
Just a few days before the 2011 Auburn Cord Duesenberg Festival, an arrest warrant was issued for Kruse stemming from an allegedly unpaid sale during Kruse International's 2008 Hershey, Pa., auction. At that time, Kruse spoke to Old Cars Weekly about his efforts to pay off his debts, and about what his future plans might include.
"It hasn't been easy, but we have made a lot of progress," Kruse said. "The list of people I owe has shrunk from 67 to 18, and I have tried to pay off those who needed the money most, first. I still promise that I am not going to do what others have done to me - that is to declare bankruptcy to get out of my debts."
On the day we met with 69-year-old Kruse, he looked healthy and was in good spirits despite experiencing medical issues in the past year.
"Late last year, I had surgery for intestinal cancer," Kruse revealed, "and just as I was recovering from that, I caught a flu-bug, that manifested itself into a very unusual strand of pneumonia. That had me in the hospital for over six weeks and I am still going through physical therapy three times a week."
When asked about the recent news of an arrest warrant from Pennsylvania, Kruse said he couldn't discuss the specifics of the case, but said he expected the matter would be resolved in short order. He had appeared before a local judge and was free on bond pending extradition orders.
"I am really sorry for the trust I have lost with so many people," Kruse said. "But to those I owe money to, they can rest assured, I will do everything in my power to get them paid."
Kruse has sold off a number of his assets, including properties, many of his collector cars and other artifacts, and has also mortgaged his remaining properties to raise funds. He still hopes that some of the people who owe him money will pay him, which he would then use to pay his debts.
Despite a suspended auction license, Kruse says he isn't ready to get out of the hobby just yet.
"Well, I really don't want to retire completely," he said. "We are still very active with our museums here in Auburn. I think I would really like to write a book about this ordeal, and I would really like to keep active in the hobby. I made a lot of good friends over the years and many of them have stayed by my side and supported my efforts."
Our visit was short as Kruse had to take the seat in a Duesenberg as an honored figure in the Auburn-Cord-Duesenberg Festival's parade. Many in Auburn still consider Kruse to be an icon in the community, and even as we toured the renamed Auburn Auction Park during Auction America's 2011 fall sale, several dealers shared fond recollections of their days with the "Dean of Auctioneering."
Perhaps one day Kruse will again be at the apex of the car hobby, but it will be a challenging road back.
(OLD CARS Weekly News and Marketplace, October 4, 2011)