Legal Files (68)

  We recently reported on the status of a lawsuit involving the Briggs Cunningham Corvette, which is ongoing (December 2013, p. 40 and January 2014, p. 42). Domenico M. Idoni, one of the plaintiffs in that case, is now the plaintiff in another lawsuit involving another Corvette, the “Real McCoy.” That’s either bad luck or quite an appetite for litigation! The story is taken from the parties’ court filings. The Real McCoy is a 1956 Chevrolet Corvette SR prototype that Chevrolet built to race. John Fitch ran it in the 1956 12 Hours of Sebring, finishing 1st in class and…
The 2014 Scottsdale auctions showed that many collectors are taking advantage of the hot market and selling cars for record prices. But many of those collectors are also learning that we are in an era of high income tax rates. So, how can collectors minimize the tax costs? Basic tax principles Let’s start with some basic principles. The gain on the sale of your collector car is the difference between your net sales price and your income tax basis. Your net sales price is the gross amount received, less your selling expenses. In an auction setting, the selling expenses can…
An SCMer wrote asking about potential liability if he sells his vintage Formula One car and the buyer is later injured as a result of a defect in the car. He knew he could clearly state that the car was being sold “as is” but wondered if that would be sufficient. He was particularly concerned because vintage parts are not readily available and often have to be built from scratch, creating greater risk of design and manufacturing defects. One’s first reaction is: Why worry? It’s a race car, racing is a dangerous activity, and everyone knows you take the risks…
Since a 2001 Porsche Boxster S resides in the “Legal Files” garage, this letter from noted Porsche authority Pete Zimmermann caught my attention: Dear Legal Files: It appears that Porsche has a problem. A really big problem. All because of a bearing, to be exact, an IMS (Intermediate Shaft) bearing. That bearing is an internal engine part, and it fails. Repair cost can range between $3,000 and $20,000-plus. Unlike past engineering mistakes, Porsche ignored the IMS bearing problem for far too long. Too many engines have failed, or cost owners dearly. Porsche did eventually acknowledge the problem, but not before…
 Last month’s “Legal Files” (December 2013, p. 40) reported on the conflicting ownership claims to the Briggs Cunningham #1 Le Mans Corvette. The claims of plaintiff Dan Mathis Jr. took an unexpected turn when defendant Kevin Mackay’s attorney discovered that Mathis had failed to mention the Corvette when he filed bankruptcy. That put his bankruptcy trustee in control. The trustee was set to auction Mathis’s rights on October 15. Mathis’s partners, Idoni and Borelli, had submitted a bid of $25,000, but it was speculated that Mathis would derail the sale by filing an appeal. Mathis did not appeal. The trustee…
Howard Coombs At this writing, a U.S. Bankruptcy Court trustee is set to auction off the ownership rights — whatever they might be — of Dan Mathis Jr. in regards to 1960 Corvette VIN 00867S103535. This car is one of the legendary Cunningham Corvettes — one of the three that competed at the 1960 24 Hours of Le Mans. The current bid of $25,000 was made by Mathis’s partners. Whether the auction will actually take place is yet to be determined, as Mathis still has time to appeal the Bankruptcy Court ruling that ordered the sale. If the sale is…
Monterey Car Week is the closest we get to automotive nirvana. We have grown accustomed to the week’s three major problems: finding acceptable accommodations, finding enough time to do everything we want to do, and getting decent dinner reservations. This year, for the first time, another problem manifested itself — car thieves have discovered Monterey. Four collector cars were stolen during the weekend: two from Mecum, one from Russo and Steele, and one from a bed-and-breakfast parking lot in Pacific Grove. Coincidentally or ominously — we can’t tell which — they were all Chevrolets. A red, restored 1962 Corvette was…

Leasing to Play

Written by October 2013
Auto leasing hit historic highs in the past couple of years and now finances about 27% of new-car sales. Leasing is particularly popular with the luxury brands — 75% to 80% of new Mercedes-Benzes and about 50% of new BMWs are leased. And specialty collector-car leasing companies such as Putnam Leasing and Premier Financial Services have become major players in financing collector-car transactions. J.J. Best Banc & Co., prominent in the field as well, offers traditional financing. But leases in the collector-car market are quite different from those in the new-car market. Different ends Traditional, new-car leases are called “closed…
A Ferrari owner was in deep financial trouble. Business difficulties had left him pretty well broke. Worst of all, he owed the IRS more than $3 million, and an IRS agent was hot on his heels to collect. In need of cash, the owner approached his bank for a loan. Since the IRS had filed liens for the unpaid taxes, the bank required collateral to secure a line of credit. All that was available was the 2005 Ferrari, so the bank took a security interest in it to secure a $200,000 line of credit. The bank also took possession of…
On April 28, Publisher Martin hosted the Round Fendered Volvo Club at his home for a viewing of the movie “Swedish Auto.” A few days later, a club member who drove his Volvo 122 wagon to the affair wrote this interesting account of the demise of his Volvo. “Legal Files” has added comments — with the club member’s permission. I was driving on a one-plus mile stretch of residential road in Portland, OR. I was at the 25 mph speed limit, and a car was about three car lengths behind me. But I saw a car behind him swerving left…
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