Judge OKs Transfer : Lawyer to Get DeLorean Estate as Fee for Defense

A U.S. District judge Friday approved the transfer of former auto maker John Z. DeLorean’s Pauma Valley estate to defense attorney Howard Weitzman as payment for legal fees, rejecting charges that the move was illegal and fraudulent.

Judge J. Lawrence Irving said in a bench ruling that the transfer was legal and necessary to compensate Weitzman for his successful August 1984 defense of DeLorean on criminal charges of trafficking in $24 million worth of cocaine. Weitzman is also defending DeLorean in a 15-count criminal indictment issued in Detroit that charges DeLorean with defrauding his DeLorean Motor Co. investors of $18 million. That case has yet to go to trial.

In April, 1984, the trustee for the bankrupt DeLorean Motor Co. filed suit to block the transfer of the property. Trustee David W. Allard Jr. charged that the “conveyance of the property to Weitzman . . . was made with the specific intent to hinder, delay and defraud his creditors, including the trustee.”

But Irving ruled that Allard’s attorney, Sheldon Toll, failed to prove the allegations of fraud and said that the mere “transfer of property as retainer for legal services is not fraudulent.”

In approving the transfer of the 48-acre ranch, Irving praised Weitzman for getting DeLorean acquitted on the cocaine trafficking charges despite what he said was an overwhelming appearance of guilt. DeLorean was videotaped while allegedly arranging a drug deal with undercover FBI agents.

On the film DeLorean is seen picking up a suitcase loaded with cocaine and is heard uttering the words, “Good as gold” as he contemplates the street value of the drug.

“He (Weitzman) pulled off the legal miracle of the century (in getting DeLorean acquitted),” said Irving. The judge went on to commend Weitzman for his dedication to DeLorean’s defense and said that the lawyer was under considerable pressure because the DeLorean case had “put his career on the line.”

The Pauma Valley property in North San Diego County, which is reportedly worth about $2.5 million, is a fair equivalent for the $2.5 million in legal fees owed Weitzman, said Irving. “The object motivation of transferring property to defense counsel . . . was so defense counsel could present an adequate defense to keep (DeLorean) out of prison,” said Irving. “This was done to compensate Mr. Weitzman for past services, which were substantial, and for future cases.”

Allard had attempted to put a lien on the Pauma Valley property to protect the creditors who have filed claims totaling more than $19 million against DeLorean’s bankrupt car company. According to Allard’s 1984 complaint, the $19 million in loans was made available to DeLorean for the development of his stainless steel gull-winged sports car.

Irving also rejected another allegation by Allard that Weitzman’s fees for DeLorean’s defense were excessive. The judge pointed out that DeLorean never complained that the fees were excessive and said that it was reasonable for Weitzman to charge $2.5 million to defend the former auto maker.

In addition to approving the transfer of the property, Irving also gave Weitzman permission to sell the estate if he could find a buyer. Weitzman said he has not decided what he will do with the property.