DETROIT -- DeLorean Motor Co. agreed Monday to sell virtually its entire United States' assets plus the right to distribute 1,094 stainless steel sports cars in Northern Ireland to Consolidated International.
In an out-of-court settlement, DMC gave up its battle for the rights to 649 of the gull-winged autos to which Consolidated, based in Columbus, Ohio, holds title.
Federal bankruptcy court Judge George Woods is set Nov. 8 to make a final ruling on the settlement.
Attorneys for the automaker would not disclose the financial aspects of the settlement. But Consolidated reported a bid Sunday of 'a substantial sum' to DMC's receivers for a 45-day option to acquire a 99-year lease on the sports car company's Northern Ireland plant.
The purchase of DMC's U.S. and British assets reportedly would cost Consolidated $80 million. The company specializes in buying inventories of bankrupt or struggling firms.
Demand for the autos has skyrocketed since John Z. DeLorean's arrest earlier this month on federal drug charges. The cars have a sticker price of $26,000 but some dealers are getting up to $10,000 more.
The two sides last week clashed in federal bankruptcy court over the 649 cars located in New Jersey and California, valued at $17.5 million, which were among 1,191 purchased by Consolidated earlier this year.
DMC claimed an agreement allowed the company to buy back the cars if it filed for bankruptcy, which it did Oct. 25.
However, attorneys from both sides met in Columbus Sunday and reached the settlement late Monday. Sol Shenk, the president of Consolidated, said he was 'satisfied' with the arrangement.
Under the terms of the settlement, presented to Woods, DMC agreed to give up its claim to the 649 sports cars. It said DMC dealers would place orders for the autos with Consolidated and its partner, Group Investors, Inc.
In addition, Consolidated also will take over the distribution rights to the 1,094 autos in Britain as well as DMC's parts inventory located in New Jersey and California.
Should DMC's receivers in Britain agree to Consolidated's estimated $80 million bid for the plant, Consolidated agreed to pay DMC $50,000 per year. Consolidated also agreed to pay $1.25 million as soon as the federal judge approves the order plus the remaining sum which attorneys would not disclose.
The only items retained by DMC are some office furniture and warehouse equipment. The company is closing its New York City office this week.
DMC attorney Lawrence Snider nodded when asked if the settlement means DMC no longer has a U.S. base of operations.
'We still have one or two cars plus a valuable prototype (of the DeLorean auto) which we will attempt to sell,' Snider said.
He would not comment on whether DeLorean himself was informed of the deal but said he felt it was in the best interest of the company's 700 creditors who will get details of the deal this week.