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Embattled auctioneer Dean Kruse did not own three historic Nazi command vehicles when he used them as collateral for a loan now in default, a bank claims in a DeKalb County lawsuit.
Hillcrest Bank of Overland Park, Kan., has asked a judge to hold Kruse in contempt of court, alleging he violated terms of a loan on which he still owes $6.5 million. A hearing on the case is scheduled for 8:30 a.m. Monday in DeKalb Superior Court.
The case caps a year of turmoil for Kruse and Auburn-based Kruse International, which has the lowest possible Better Business Bureau rating after months of complaints.
An assistant at Kruse’s Auburn office Wednesday said he was out of town. Kruse told The Journal Gazette in August the recession has hurt his sales and caused him to fall behind on some payments.
Among the pending challenges facing Kruse and his companies:
•Last month, a federal judge ordered the seizure of Kruse’s 1985 Cessna jet after Kruse defaulted on the loan. Because Kruse failed to give the aircraft back and let its insurance lapse, the judge authorized the intervention of U.S. Marshals if needed, according to court documents.
•In June, Kruse – whose primary residence is in Auburn – lost a Phoenix home he bought in 2006 to foreclosure. Kruse owed nearly $3.2 million on the home, which had initial monthly payments of more than $11,900 and an adjustable-rate mortgage for $2.85 million, according to documents filed with the Maricopa County, Ariz., recorder’s office.
•Kruse International owes more than $52,000 in back taxes to the state of Arizona and nearly $37,000 to the city of Phoenix, according to documents from that city and state. Arizona officials have said Kruse’s license to operate in that state, where the company has held auctions for more than 30 years, is suspended after complaints from sellers.
Hillcrest Bank filed suit in August against Kruse, his wife, his auction company and several limited-liability companies he owns, claiming he defaulted on a 2007 loan originally for $13.6 million.
In addition to the Nazi command cars – three 1939 Mercedes-Benzes that Kruse tried unsuccessfully to sell during his Labor Day auction in Auburn – collateral for the loan includes American Heritage Village, a site near Interstate 69 and County Road 11A that Kruse has hoped for years to develop. The land adjoins Kruse Auction Park.
Hillcrest requested last month that Kruse be held in contempt because an Arizona man, Tim Hurst, claims in an Internet advertisement that he owns the three Nazi command vehicles. Kruse argued in court documents that he still owns the vehicles.
Hurst’s attorney, E.J. Peskind, says Hurst received a bill of sale for the vehicles in 2006 – before the date Kruse took out the loan from Hillcrest Bank – in exchange for a property in Arizona.
