Financial crisis
In 1923, the company underwent “unusual” procedures to take back its declaration of dividends.[25] A series of internal business problems lead to the initial breakdown of the company.[26] A federal judge rejected an offer of $84,271 made for assets of Daniels Motor Company at public auction for the company's Reading plant.[27] The auction was held by the company's receivers of equity under adherence of the US court system. The courts told receivers they could apply later for a re-sale after they have considered two proposals made in court. First, the president asked for two weeks to develop a reorganization plan. Second, one bidder offered to buy the land for $110,000. The second option fell through when the court found the proposal inadequate.[28] In 1924, as a last-ditch effort to save the business, the company announced its line of products would begin to be sold at higher prices in order to make a profit. Additionally, it was announced the moving of its company headquarters from Reading to Philadelphia.[29] Later in 1924, anyone holding claims against the “defunct” Daniels Motor Company were notified to present their claims[30] to the Philadelphia court district who has appointed a special master dedicated to passing the final accounts of the corporation.
In a statement from the company:[31]
"With a desire to produce the best material available and to obtain products at the lowest prices, a heavy cash investment was made in raw materials. These expenditures have placed the company in the position of not having sufficient cash to conduct its business along the best and most economical lines. With the object of conserving assets, protecting the creditors, serving the public, and to insure a continuation of the company as soon as the present financial situation is straightened out, the company is asking for a temporary receiver in equity."
The corporation was sold by the order of the district court. One hundred people attended the public auction and six bids were made. George Billman, a real estate dealer, bought the Reading plant property. The property was estimated to be worth $300,000.[32] George Nagle purchased the name, trademarks, and drawings for $1,900. Levene Motor Company of Philadelphia acquired the assets of Daniels Motor Company. The company paid $90,000, $50,000 subject to mortgage. The company planned to invest $20,000 in improvements to convert the plan to a warehouse and manufacturing facility for their own purposes.
