DETROIT -- A federal bankruptcy judge Tuesday approved the sale of DeLorean Motor Co.'s assets to a Columbus, Ohio, firm for $1.5 million, despite an attempt by John Z. DeLorean's brother to buy the company.
Judge George Woods approved the purchase of DMC's 649 remaining gullwinged sports cars, parts and distribution rights by Consolidated International, saying it was in the best interest of the defunct automaker's 700 creditors.
Consolidated, a liquidation firm, will wipe out its own claim of $9 million against DeLorean along with paying $1.5 million for the assets.
Charles DeLorean, a Lakewood, Ohio, Cadillac dealer, bid $10.5 million for the company along with Michigan Cadillac dealer Don Massey. Charles DeLorean said his older brother asked him to try to save the company.
'Had our plan gone through, we would have had a chance to survive,' said Charles DeLorean. 'Now I don't think there's even the remotest possibility.'
DMC filed for bankruptcy reorganization Oct. 25, less than a week after John DeLorean was arrested on federal drug charges in Los Angeles.
Consolidated originally bid $1.2 million but upped the price after Charles DeLorean's bid for the company last week.
The debt wipe-out plus cash made the deal for DMC equal to the bid by the younger DeLorean.
'It's fair -- fair for everybody,' said Sol Schenk, president of Consolidated.
Attorneys for DMC said the settlement works out to about 3 cents on each $1 of debt.
DMC's secured creditors get first crack at money from the sale. They include the French automaker Renault and the British government, which holds DMC's Northern Ireland plant in receivership. Each is owed $17 million, attorneys said.
It is unlikely any unsecured creditors -- including the National Football League, various law firms and automotive suppliers -- will ever get a dime of the $40 million they are owed.
Richard Pierce, Charles DeLorean's attorney, estimated Consolidated and Group Investors will make about $6 million on the deal through the sale of the hot-selling cars and parts.
Pierce said his client had wanted to return the profits, except for a small commission, to the estate so creditors would get paid.
The deal specifically calls for Consolidated to assume ownership of 649 cars with sticker prices of up to $26,000 worth a total of $17.5 million. The firm also will get parts worth about $1.2 million, U.S. distributorship rights for the cars and office furniture.
Attorneys for Consolidated revealed in court they have purchased 1,090 cars from the British receivers and will sell them in this country.