MaryJo Webster, St. Paul Pioneer Press, Published November 11 2010
Hecker bankruptcy estate may get $400K from Fargo-based bank
The deal, if approved by a judge early next month, would be one of the largest amounts of money recovered by the bankruptcy trustee since the former Twin Cities auto dealership mogul filed for bankruptcy protection in June 2009, owing $767 million.
“We were pleased that we were able to reach a full and final amicable settlement with the trustee, and it comes with a full release of any additional claims that the trustee may ever have against the bank,” said Cynthia Hegarty, legal counsel for VISIONBank.
VISIONBank agreed to pay in three installments over the next two years as a result of trustee Randy Seaver’s claims that the bank received preferential treatment over other creditors to Hecker’s estate. Hecker made debt payments to the bank of more than $3.1 million when he was insolvent in the months leading up to his bankruptcy filing, according to the settlement.
Hegarty said VISIONBank didn’t acknowledge receiving any preferential treatment.
“Those are private settlement discussions that were had between the bankruptcy trustee and his counsel and our office, and we feel like we did reach a mutually acceptable settlement for both parties, and that’s really the only comment that we have that we’d like to make on this matter,” she said.
Hecker still owes the bank more than $7 million in unsecured debt. VISIONBank is one of several creditors that accused Hecker of obtaining loans fraudulently. Its lawsuit was dismissed earlier this year after Hecker abandoned efforts to have his debts forgiven in response to allegations from Seaver that he hid assets and lied to the court.
Ralph Thomas, a longtime friend who has been helping Hecker with legal costs and other expenses in recent months, is a part owner of VISIONBank.
Seaver so far has collected nearly $2 million from selling Hecker’s assets or through litigation or negotiation. The money will be first used to pay the trustee’s salary and expenses, including paying numerous lawyers. Any money that remains will be divided up among unsecured creditors.
Tuesday, Seaver also asked U.S. Bankruptcy Judge Robert Kressel to approve two more auctions of Hecker’s assets, which are expected to include 89 watches, several guns, an elaborate glass artwork, Segways, scooters, all-terrain vehicles, dirt bikes, trailers and numerous other items.
The vehicles, guns and miscellaneous items are scheduled for auction Dec. 11 and the watches and glass artwork are set for Dec. 16. Both will be held at Fred W. Radde & Sons auction house in New Germany. Start times have not been set.
Once the owner of a network of automobile dealerships and a large leasing company, Hecker, 58, is in Sherburne County Jail awaiting sentencing on federal fraud charges. In September, he pleaded guilty as part of a plea bargain with prosecutors and faces up to 10 years in prison.
Forum reporter Mike Nowatzki contributed to this report.