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Continued: Hot cars, cold times: Petters' ritzy rides losing value

  • Article by: JON TEVLIN , Star Tribune
  • Last update: January 11, 2009 - 2:31 PM

When the court-appointed receivers began confiscating property from those charged or associated with Minnesota businessman Tom Petters, they found that the group shared something in common with the queen of England, Ralph Lauren and rappers Jay Z and Ludicris.

Bentley automobiles.

The $200,000 British muscle sport sedan -- adored by both Britain's aristocracy and America's nouveau riche -- was also a must-have among some of Petters' associates, victims and close friends.

Now those Bentleys, as well as numerous other luxury cars, are being sold to recoup losses. But they are hitting the market at a time when even fewer people than usual can afford them.

Ranging from Petters' 2008 Bentley Continental GT (valued at $115,000) to the 2007 convertible ($250,000-plus) owned by his associate Michael Catain, those cars are helping to glut the already small market for the high-end cars, both here and across the country.

In 2008, there were 133 registered Bentleys in Minnesota, most of them in Minneapolis and the western suburbs. Maserati of Minneapolis has 13 Bentleys for sale, about double its typical selection. And that's despite the fact that it passed on taking any of the Petters-associated wheels.

"It's just not as cool to drive up in a $200,000 car as it was a year ago," said Karl Schmidt, managing partner.

Not notorious enough

Some products gain value through the infamy of their owners. Think Al Capone's car or O.J.'s suit. But the taint of association with fraud, even one as large as the $3.5 billion fraud Petters is accused of heading, doesn't serve as a draw. Attempts to sell items associated with alleged swindler Bernie Madoff on the Internet have likewise drawn faint interest.

"Almost all of these ultra-luxury cars have been owned by someone prominent," Schmidt said. "The typical Bentley owner has $15 million in net worth or more. It's not unusual for them to have six, seven, 10 cars," he said.

"I had Nicolas Cage's Ferrari," Schmidt added. "Maybe you want to buy Michael Jordan's Bentley. But who is going to buy Tom Petters' car?"

Maserati of Minneapolis was contacted about the Petters-linked Bentleys.

"They called us early on, and I think we bid for about half of what they were worth," said Schmidt. "We decided we didn't really want anything to do with them."

Authorities have found and seized nine cars belonging to Petters, one from Catain, one from Robert White and two from Larry Reynolds. Catain, White, Reynolds and Deanna Coleman have pleaded guilty. Petters has said he is innocent. Another person affiliated with Petters, Frank Vennes, has not been charged and says he is innocent, but his property has been seized.

Gary Hansen, the receiver for Vennes, said Vennes has five cars, including a Bentley that has already been sold in Florida for $138,000.

Petters' vehicles include six Mercedes cars, a Lexus LX470 and a Lincoln Navigator. The Bentley was reportedly a gift from a friend who eventually became a major victim.

Catain's Bentley convertible, valued in court documents from $250,00 to $280,000, is on a lot in St. Louis. Reynolds' 2002 Ferrari 360 Spider and 2007 Bentley are on a lot in Beverly Hills.

Doug Kelley, who is in charge of collecting and selling the property of several of the defendants, acknowledges that the cars are a tougher sell than they would have been in recent years.

"The word I'm hearing back is the market has fallen," Kelley said.

The people doing the deals for Kelley say Bentley prices are falling 5 percent per month.

Kelley said the cars are just a glimpse into the booty that's hitting the market. Jewelers who once considered Petters and friends their top customers may soon be helping liquidate items ranging from Rolex watches to a 4-karat diamond.

So what is it about a Bentley that makes people fork over $200 grand -- besides the hand-stitched leather (sometimes beluga) seats, burr walnut console and Breitling clock?

"They are the ultimate balance of power and performance, but you can put six people in it,'' Schmidt said. "A Ferrari is a toy. An Aston Martin is a toy."

Both of those are almost exclusively male toys, but not the Bentley: About 45 percent of drivers are female. If a man wants to talk his wife into a $200,000 car, a Bentley convertible is a much easier sell than a Ferrari, Schmidt said. (Hint to husbands: only 348 shopping days left until Christmas).

"I've never had that problem," Kelley joked.

Those who can afford one might want to jump, Schmidt said.

"There has never been a better time to buy," he said.

Jon Tevlin • 612-673-1702

  • about this series

  • The Star Tribune's coverage of the federal fraud case against entrepreneur Tom Petters and the struggles of Petters-owned Sun Country Airlines.
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