DETROIT -- RM Auctions today said it has bought the Kruse International Auction Park in Auburn, Ind., from financially troubled auctioneer Dean Kruse and plans to hold the site’s annual Labor Day weekend car auction Sept. 2-6.
Rob Myers, RM Auction CEO, said his company will spend the next several weeks making upgrades to the auction facility and lining up consignments. Myers said he expects to have between 1,000 and 1,500 cars for the September auction. He also plans to hold a spring auction at the complex.
The acquisition vaults RM Auctions, based in Chatham, Ontario, into a high-volume segment of the auto-auction business that caters to fans of muscle cars, customs and hot rods. Until now, RM Auctions has focused on smaller, high-end events and vehicles -- selling 200 or fewer vehicles in places such as Monterey, Calif.; Amelia Island, Fla., and Monaco.
The deal was announced today in Auburn, although speculation of Kruse selling had circulated for weeks after the State of Indiana canceled auction licenses for Kruse and his business in late May.
Kruse appeared to have been in trouble since last year, when reports surfaced of consignors (sellers) at auctions not getting paid and buyers not receiving their cars. Kruse told AutoWeek, an affiliate of Automotive News, last summer that the financial woes were the result of a down economy and cash-flow problems.
Myers noted that RM Auctions had only purchased the Auburn auction-park assets from Kruse, not the entire business. The purchase price was not disclosed. The auction site will be renamed Auctions America by RM Auctions.
At the announcement, Kruse said he would be available as a consultant to RM Auctions but would not be a full-time employee. Myers said Kruse has no legal or financial interest in Auctions America.
Asked whether the deal would help him pay people who sold cars at Kruse Inc. auctions but haven’t been given the proceeds, Kruse said: “I intend to earn as much money as I can. The state has given me three years to pay consignors, but I want to do it faster than that. My bills are mine. I have a list of 62 people left to pay. I carry the list with me, and as I pay them I cross them off.”
Some Kruse Inc. employees will be offered jobs with Auctions America.
Ed Cepuran, the CFO of Auctions America by RM Auctions, said the company will set up client trust accounts and accelerated pay processes for buyers and sellers at the Labor Day event.
“We have to restore some integrity and confidence back into this company,” Cepuran said.
He said he has spent the past several weeks looking at Kruse’s operations to see what went wrong.
“He received a series of bad advice over the past couple of years and he acted on that advice,” Cepuran said.
Myers said he had been considering expanding his business for several months and started discussions with Kruse in April.
“In the last five weeks, I’ve been on the road and I’ve had to turn down hundreds of cars because I had no venue for them,” Myers said.