Originally published in the Minneapolis Star 5-30-79


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Kit car spin-out

Bradley Automotive looking for high gear to leave troubles behind.

By Ralph Vartabedian
Minneapolis Star Staff Writer

Bradley Automotive president Gary Courneya has parlayed a $2,500 investment into a multimillion dollar corporation in just 10 years. But, along the way, he has left a trail of angry people and lawsuits across the country.

Undaunted, Courneya is still "selling the sizzle."

Sporting a Florida tan and stylish attire, he recently flew back to the Twin Cities and told a news conference he had a signed agreement to produce a "super car." It would go 130 miles on a gallon of gas, he claimed.

That kind of a superdeal would certainly help Courneya's Plymouth-based kit car firm, which is operating under the Federal Bankruptcy Code. Courneya, accused of fast talking more than once, saw his company go into a financial tailspin last year.

But the promise of a supercar could be a long shot. The organization on the other end of the supercar deal, headed by race-car mechanic Ralph Moody, says it had signed no contract with Courneya, although it is discussing a possible deal.

Courneya is energetically persisting in his effort to build a supercar, and recently testified in bankruptcy court that he has even accepted two deposits totaling $10,000 for deliveries of the vehicle.

Courneya, 36, has overcome tremendous odds in getting to where he is. He grew up in Detroit Lakes, Minn., one of eight children of a mailman. He says he worked on a loading dock as a teen-ager. After graduation from high school, he worked as a bartender. He later polished his selling act as a sportswear salesman in Beverly Hills, Calif.

But the odds seem to be mounting once again against the president and co-founder of Bradley Automotive.

Defecting Salesmen
Bradley has been operating under Chapter 11 of the federal bankruptcy laws since last fall, after Franklin National Bank of Minneapolis cut off its credit and seized more than $100,000 the company had on deposit.

Among other things, the bank said, Courneya was bleeding the corporation by taking big loans at a time when Bradley Automotive was losing money and failing to pay delinquent accounts.

The loans, which went to Courneya and four other directors, officers and stockholders, exceeded $130,000, according to court records. Several of the loans, including part of Courneya's, are still unpaid. Some of the loans were even renewed just several days before the company went into bankruptcy court.

Meanwhile, sales last fall took a precipitous dive after seven salesmen defected to a competing company. The salesmen told The Star they wanted to escape the pressure and hyped-up environment of Bradley Automotive. Courneya subsequently went to court to prevent further defections.

The ceiling was caving in after years of mistakes. The Minnesota Attorney General was investigating the firm for deceptive sales practices. And today many of Bradley's old friends say the company took an excursion into a seamier side of corporate existence.

One result has been numerous lawsuits. Bradley has been sued by its stockholders, employees, customers, bankers and suppliers. Much of the time Bradley lost or settled out of court.

But beyond the suits, Bradley Automotive has left a trail of angry people who feel the company deceived them, took them for fools and, most importantly, took their money.

"They are very smooth talkers," said Thomas Duckwall, a former customer in North Carolina. "I've run into the same thing in the worm raising business."

But at one time Bradley Automotive was a prominent member of the Twin Cities business community.

Courneya had led in the transformation of the kit car industry from a backyard operation into a high volume business, on the relied heavily on hyped-up telephone sales techniques.

The product the company sells is a flashy fiberglass sportscar shell that purchasers assemble themselves and plop onto the chassis of a Volkswagen Beetle. The kits cost about $5,000, and the buyers must obtain their own Volkswagen.

The money really flowed in the heyday of the company. It was a fast cash, high margin business with little capital overhead. Bradley Automotive doesn't really produce anything. Every major component of the car is jobbed out. And sales produce quick revenue, since customers pay cash on delivery.

Bradley Automotive President Gary Courneya

Star Photo by Charles Bjorgen

And former Bradley salesmen said kits were typically shipped short of parts. "Sometimes, they would ship a kit and then they "the customers" would call back and ask, 'Where are the bumpers? Where is the steering wheel?' " recalled former salesman James Newman.

Dave DeWuske, another former salesman now at a competing kit car company, said, "We never once shipped a complete kit while I was there."

Courneya said the Bradley kit car has an average of 1,200 parts. Cars were sometimes sent short of certain parts that were on back order, he explained. The parts would then be sent after delivery of the kit, he said.

The cars sometimes ran afoul of state automobile equipment laws. A Florida customer won a $3,570 judgment against Bradley Automotive because the headlights of the car were not high enough off the ground. Courneya said state laws are often more stringent than federal Department of Transportation standards.

The sales practices at Bradley led many salesmen to short careers at the company. "It was a revolving door," one salesman said, "When I left after nine months, there was only one guy who had been there longer."

Finally, the dam burst on Bradley and seven key salesmen left the company last fall to take jobs at a competing company, Fiberfab Inc., which was setting up operations in Minneapolis.

Courneya claims the defections led to a drop of $300,000 in sales in October and was one reason the company sought protection in bankruptcy court. Shortly after sales dropped, Bradley Automotive's line of credit at Franklin National Bank was called and its deposits were seized. Several days later it filed papers in bankruptcy court.

A flurry of lawsuits has followed. Bradley won an injunction against the defecting former salesmen, preventing them from luring any more salesmen away. The bank sued Bradley and Bradley countersued.

The bank cases were settled out of court recently and Bradley agreed to repay its outstanding debts to the bank at the rate of $2,500 weekly. It also agreed to pay the bank's legal fees of $18,000.

As for the future of Bradley Automotive, things may be looking up. After losses for three months during the winter, the company has shown a modest profit for the past three months. Over the past six months, the company has lost about $18,000, according to testimony in bankruptcy court.

Goodbye to the Jaguars
The improvement points up the lavish style of living that had contributed to the firm's problems. Gone are the Jaguars, the boat and the fancy offices. Some big salaries were slashed by order of the court, as well.

"The company I don't believe has been lavish," Courneya said. Many of the cutbacks wee more for show that anything else, he said.

"If you are in Chapter 11 and you drive up in a Jaguar, what are the creditors going to say?" he remarked.

Courneya also has repaid some of the cash advances he took. At a recent court hearing he paid about $77,000 to the corporation, borrowing heavily to do so.

Another loan recipient, David Fuller, is both a creditor and a Bradley stockholder.

Fuller, who co-founded Bradley Automotive, received the loan before he bailed out of the company about a year ago. His own company, Autocraft Inc., sold fiberglass bodies to Bradley Automotive before the account went delinquent.

No legal action from any party has directly followed from the loans, but an attorney for the creditors of Bradley Automotive has maintained the loans violated Minnesota state law. The violation would be a civil violation, not a criminal one, says Gerald Laurie, the creditors' attorney.

"It was not illegal, absolutely not," responds James McGovern, attorney for Bradley Automotive.

Barring further mishaps, Courneya says Bradley Automotive will pull out of Chapter 11 as a profitable company. Creditors have approved the repayment plan--which calls for creditors with claims exceeding $2,000 to be paid 60 cents on the dollar--and Judge Nordin has confirmed it.

The judge said proceedings will continue for several months, to settle disputed creditor claims. Execution of the repayment plan is scheduled to take three years.

The company became a toast of the town. It moved to prestigious executive offices at Shelard Plaza, which rented for about $5,000 a month.

Bradley Automotive had cars on display at major airports and advertised in a long list of established magazines.

And Bradley acquired Jaguars for Courneya and his wife. A 28-foot company cabin cruiser was purchased for weekend fun.

Big tabs at fashionable liquor lounges were amassed as Courneya attempted to impress those around him, according to his former salesmen who have ranged from writers to stockbrokers.

"I asked him once, 'Gary, what is the most important thing in the world?' He said, 'Millions of dollars, millions of dollars, millions of dollars,'" recalled a former Bradley salesman. "He's a spender. He's the craziest guy I've ever seen."

And Courneya had the requisite flamboyance for the business. He personally sold kit cars to big name auto buffs like Sen. Barry Goldwater and Liberace.

"Gary has a big ego. He is very flamboyant. He loves the fancy clothes," remarked Donald Soukup, president of Community Investment Enterprises Inc. a St. Louis Park venture capital firm holding stock in Bradley Automotive.

Northwestern Bell Telephone Co. even featured Courneya in full-page advertisements testifying to the success of telephone sales techniques. It was ironically called Phone Power.

But the sales crew at Bradley Automotive had another name for the supersell it so proudly perfected, according to its former salesmen. It was called "selling the sizzle." That meant "burning the britches off the customer."

And in the process of building sales to an annual level of $8 million in just a few years, more than britches were reportedly burned. Some customers say they were financially burned in the process. Many former salesmen agree.

The sales pitch
Basically, the sales pitch to potential customers went like this:

"Buy a Bradley GT and not only will we sell you the car at a factory-direct discount wholesale price, but we'll make you a sales representative for the company and you can earn plenty of money just showing your Bradley GT to potential customers. And our records show that you will be the first Bradley sales representative in your area."

But interviews with a number of former customers by The Star indicated that many elements of the offer were deceptive in some cases, and untrue in others.

The Minnesota attorney gen-eral's office, meanwhile, alleged last fall that Bradley Automotive had engaged in misrepresentation. An investigation directed by Christie Eller, Minnesota special assistant attorney general, prompted bankruptcy Judge Hartley Nordin to order Bradley to stop making misrepresentations, and to stop offering customers sales representative positions as an inducement to buy a kit car.

The investigation sub-stantiated much of what the customers had been saying: That supposed discount prices were the usual prices; that the company didn't always provide sales leads to field representatives, and that many customers were told they would be the only representatives even when others already were established.

"It was the only time I was ever involved in that kind of a business," recalled former salesman Robert Stubbs. "They went as far as to out-and-out lie to people. The zone managers would say, 'Tell the customers anything they want to hear.' "

Stubbs left the company after half a year. He subsequently sued Bradley Automotive for back wages in Hennepin County District Court and won. Other former employees also went to court to seek judgments against the company.

Many persons apparently bought Bradley GTs with the intention of earning money part time as sales representative.

Salesman down the block Alton Cochran of Atlanta bought a Bradley with that hope. But the hope soon disintegrated into disillusionment.

The salesman involved in the transaction "was gifted with what I call a silver tongue" recalled Cochran.

"He said they were looking for four representatives in the state of Georgia alone, and they had only one so far in Savannah. Still skeptical, I checked with the Better Business Bureau of Minnesota. I also went to a lawyer who said everything was in order. They said they were all on the up and up."

But pretty soon Cochran started noticing that there were other Bradley Automotive representatives. First, in the metropolitan Atlanta area. And later, the representatives started popping up in his own neighborhood--just down the block in one case. They were all told the same story, according to Cochran and others.

"So I called Bradley and told them they lied to me and I wanted my money back. They said they couldn't do that. Well, I didn't feel so dumb after talking with this other guy who got taken in, because he was a dentist and this other guy who got taken in was a car dealer," he added.

Others tell similar stories. They claim they were led to believe they would be exclusive representatives for Bradley. And they purchased the car solely on the basis of a business investment.

"We have three children and we don't really have the money to own a sorts car like that," explained Mrs. Robert Sherrill, the wife of a diesel mechanics instructor who bought a Bradley GT. "My husband was told he would be the only distributor in Georgia. And all the time there was another one two blocks away, and another one mile away."

William Tender, an Atlanta architect, also said he wouldn't have bought his Bradley if he had known he couldn't sell cars for a profit.

"After the treatment I received I lost my interest in representing them," Tender said. "I wouldn't want to do to somebody else what they had done to me. I think they abused us terribly. We all got mud on our face and looked rather foolish."

Courneya, responding to the accusations, maintained that the company had a policy of never offering exclusive areas to potential sales representatives. He said salesmen who didn't follow the policy were fired, although he couldn't recall precisely how many had been fired for that reason.

Kits missing parts
"Selling the sizzle--I have heard the expression before," he said. "It is a nice phrase, but I don't think selling the sizzle generates the kind of sales we have achieved," he said.

"This business about exclusive (representatives) came up in not more than five circumstances," Courneya said. He adds that the company paid out $100,000 to $150,000 in sales commissions last year to field representatives.

Another recurrent customer complaint was that kits were missing parts and that the amount of work necessary to assemble the kits was much greater than the company advertised.

Robert Sherrill, who teaches at an Atlanta-area vocational education school, said the company told him that assembly could be accomplished in 90 to 150 hours. "I suppose by the time you built your fourth car you would get it down to 150 hours," he said. I thought you would already have the holes drilled. The seats weren't even upholstered."


Star Photo by Charles Bjorgen

Gary Courneya in a Bradley GTII kit car

       
Copyright 2000 Star Tribune. Republished with permission of Star Tribune, Minneapolis-St. Paul. No further republication or redistribution is permitted without the written consent of Star Tribune.

 

 




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