Kruse Inc., the auction company that sold the famous William Harrah car collection and has been synonymous with auctioning enthusiast automobiles since the 1970s, has lost its licenses in its home state.
The Indiana Auctioneer Commission ruled on Tuesday to revoke both of Kruse Inc.’s licenses, and the company has to wait seven years to apply for new ones, said Kelly Butters, a spokeswoman for the Indiana Attorney General’s Office.
Dean Kruse, the president of the auction house, has had his personal license suspended indefinitely. He can apply for reinstatement in two years. He and his company were fined a total of $70,000.
A message left at Kruse Inc., which is based in Auburn Ind., was not immediately returned Wednesday evening.
Kruse has appeared to have been in trouble since last year, when reports surfaced of consigners (sellers) at auctions not getting paid, and buyers not receiving their cars. He told AutoWeek last summer the financial woes were the result of a down economy and cash-flow problems.
The ruling is a stunning fall for a company that helped grow the popularity of auctions and collecting cars among enthusiasts. In addition to selling the Harrah collection for $41 million spread out over three auctions, Kruse also claims to have sold the first car for $1 million in cash, a 1934 Duesenberg, and Dean Kruse has presided over more than 5,000 auctions, the company Web site said. He also is known for an impressive personal collection, and has been profiled in AutoWeek for his extensive array of cars.
Terms of the ruling are not final, but have been agreed on by Kruse, his company and state officials. A written ruling is expected as soon as this week.
“This agreement is satisfactory and this remedies the situation,” Butters said. “An important aspect of this is getting the consigners repaid.”
It’s unclear what this means for Kruse’s auctions in other states. But the company and Dean Kruse cannot auction cars in Indiana or use those licenses elsewhere. Kruse held auctions in Arizona, Florida and Alabama earlier this year.
Additionally, Dean Kruse must submit quarterly reports certified by a CPA to the auction commission showing payments to consigners. If he applies for reinstatement and gets his license back, he has 18 months to have paid off all claims and civil penalties.
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