Delorean Bankruptcy

["Michael DeLuca" <mdeluca@xxxx>]

Here is a story in yesterdays 5/31/00 Newsday (local New York Paper)
about Delorean Bankruptcy and how most crediters will get 91 cents on
the dollar. Hmm I wonder if I can get those up grades I just did
covered that was warranty work wasn't it?



http://www.newsday.com/coverage/current/business/wednesday/nd7718.htm

DeLorean Bankruptcy PayoutCreditors may get nearly all that's owed
them

The Associated Press

Detroit - The DeLorean Motor Co., which
collapsed
more than 17 years ago amid charges of money laundering, is about to
end its bankruptcy proceedings, and its creditors may get almost
all of what they are owed, the company's trustee said yesterday.
U.S. Bankruptcy Judge Ray Reynolds Graves is expected to close the
case before the end of this week, trustee David W. Allard said.
"The only complication we expect is the difficulty in locating
creditors," Allard said. "Because it has been so many years, we
haven't been able to locate all of the creditors. Some have died;
many have closed." John Z. DeLorean launched his company after
quitting as vice president in charge of North American car and truck
operations for General Motors Corp. in 1973.He produced nearly 9,000
of his self-named sports cars, notable for their gull-wing doors and
unpainted stainless-steel skin that won a place in the "Back to the
Future" films.The company filed for bankruptcy protection after
DeLorean was arrested in 1982, accused in a sting of conspiring to
sell $24 million of cocaine to salvage his venture. DeLorean used an
entrapment defense to win acquittal.Attorneys originally estimated
its
creditors would receive less than 5 cents on the dollar. But because
of lawsuit recoveries, creditors may be able to collect up to their
full due, Allard said."Hundreds of lawsuit recoveries over the years
?
created a sizable estate for distribution," he said.The key to ending
the proceedings was a 1999 settlement that ended a lawsuit against
Arthur Andersen & Co. first filed in 1985.DeLorean's creditors
alleged
the accounting firm signed off on the company's financial statements
despite potential evidence of fraud. In 1998, a New York jury ordered
Arthur Andersen to pay $46.2 million. The firm appealed but agreed in
May, 1999, to settle the lawsuit for $27.75 million.DeLorean owed
about $85 million to 266 creditors when litigation began. The
company's trustee made an interim distribution of 9 percent on the
dollar to all creditors in 1990.Now, Allard has now started paying
off
creditors - raising the payout to roughly 91 percent of their
original
claim. "That's almost unheard of in" Chapter 7 liquidations, Allard
said.Legal notices will be published, and missing creditors will have
six months to come forward before the remaining money will be
prorated
among the other creditors, Allard said. Several creditors started
receiving checks last week.The DeLorean case took so long because the
British government was suing Arthur Andersen at the same time as the
U.S. case.The government had wooed DeLorean to Northern Ireland in
1976, impressed by plans to create a 2,000-worker plant. But the
plant
closed in 1982, and a year later, the government concluded it had
spent $130 million to help the venture."Because of the British
involvement in the other case, Margaret Thatcher's deposition was
taken and they had to debate discovery issues in Parliament," Allard
said. "That slowed both cases down to a crawl." John DeLorean
declared
bankruptcy in September, 1999, after wrestling with 40 other legal
cases after his criminal trial. Among his more than $18.5 million
in debts were $4.7 million in legal fees - $8 million with interest -
owed to lawyer Mayer Morganroth of Southfield.In March, DeLorean was
evicted from his 434-acre estate in New Jersey after a court-ordered
bankruptcy auction to help pay his creditors. The last residence he
reported to his trustee is a New Jersey hotel, Morganroth said
yesterday.Charles Stanziale, DeLorean's personal bankruptcy lawyer in
New Jersey, was out of the country and could not be reached for
comment.Morganroth, who represented DeLorean in portions of his
company's bankruptcy proceedings,said it was interesting to see its
creditors get so much of what they were owed. "They got a substantial
amount of money from Arthur Andersen ? so they took in a lot of

dollars," Morganroth said. They "did a really bang-up job. They went
all out and went after everyone they could to get everything they
could." The Product Recalls report will return next week.