Denny Hecker has suffered the worst body blow yet to his crumbling auto empire.
The financing arm of automotive giant Chrysler won a $476.9 million judgment against the embattled Hecker on Monday, representing the biggest chunk of the $567 million in loans, rent, mortgages and other payments that Hecker has been accused of letting slide into default. The judgment includes a $50 million personal loan that Chrysler made to Hecker "for business purposes."
And Chrysler may not be the last big lender in line for a payback. Hyundai Motor Finance Co. sued Hecker this month for $104 million that it lent to his car rental business last year to refinance nearly 4,500 vehicles.
With his efforts to reach out-of-court settlements with his lenders proving unsuccessful, it's uncertain what hope Hecker can have of reviving his businesses. U.S. automakers, under heavy financial pressures of their own, are aggressively culling their dealership ranks and phasing out certain brands.
Hennepin District Judge Marilyn Rosenbaum approved the Chrysler award without opposition from Hecker, whose attorney also withdrew from the case. It's unclear how much Chrysler will actually be able to reclaim.
In her order, Rosenbaum noted that Hecker -- in his own words -- said that he and his businesses "have not timely made certain payments" to Chrysler.
In a statement, Hecker described the result of the suit "disappointing," noting that Chrysler had been "my long-term business and financial partner."
Hecker, 56, said he is reviewing his options with legal and financial advisers.
"I remain focused on the future of my businesses as I look to retool the enterprise in these difficult economic times," Hecker said.
Since last fall, Hecker whose ubiquitous ads and outgoing persona made him a well-known business figure in Minnesota, has sold off or closed nearly all of his 26 dealerships, as well as his Advantage Rent A Car business. At one point his company claimed annual sales of $6.8 billion.
Hecker's attorney, Tim Thornton of Briggs & Morgan, said he withdrew from the Chrysler case and that his firm is withdrawing from a number of other lawsuits in which it represents Hecker.
But Thornton said some elements of their legal relationship remain in effect.
"Denny Hecker remains my friend and client," he said.
Hecker spokesman Paul Omodt said the financial implications from the Chrysler judgment "are still being sorted out." But he said Hecker intends to survive.
"This obviously limits what he can do in the near term but Denny's been buying and selling businesses all of his life," Omodt said.
According public records, Hecker and companies he controls still own considerable residential real estate, including $12 million worth of property on Cross Lake in northern Minnesota and two houses in the western Twin Cities suburb of Medina valued at $6.5 million and $1.7 million.
David Phelps • 612-673-7269
