The Utah Supreme Court has upheld a lower court ruling that prevented investors from purchasing a firm owned by luxury carmaker John De Lorean in 1983.
David Daines, attorney for LHIW Inc., said he was disappointed over the high court's decision but said "the case is far from being settled."In the decision, the Supreme Court agreed with 1st District Judge VeNoy Christoffersen's Dec. 19, 1983, ruling that LHIW failed to meet conditions of a court-ordered closing of a sale of Logan Manufacturing Co.
Logan Manufacturing makes snow grooming equipment marketed in the United States and Europe.
The Supreme Court said conditions weren't met because LHIW did not have the $5 million needed for partial payment of the purchase price. Christoffersen's ruling came in response to a lawsuit filed against De Loreanby LHIW after the sale of the plant fell through on July 6, 1983.
"The judge ruled in our favor of the breach of contract complaint and said if the Supreme Court did not allow us to buy the company, we could come back to district court to file for damages." Daines said. "That is what we intend to do now."
Ralph Walker, a former Logan Realtor now living in Denver, was a major stockholder in LHIW, formed to buy the plant during the period De Lorean was having financial problems due to his failed sports car, the DMC-12.
"At one time, the terms of the sale included a proposed $5 million loan from De Lorean to LHIW, and LHIW was also pursuing financing with General Electric Credit Corp.," Daines said. "When De Lorean backed out, we gave the court $5 million in promissory notes, but we were not willing to put up the money knowing De Lorean could not give us a clear title."
Although De Lorean was pushing the deal in the beginning, Daines said he backed out when he learned a bankruptcy court had placed a hold on the money to distribute it to De Lorean's creditors.
The decision states that an agreement between LHIW and GE Credit Corp. was not agreeable to De Lorean.