business

First, Denny Hecker's sprawling auto empire seized up. Now it looks as if he's about to get his wings clipped, too.

The finance arm of General Electric wants a federal judge to order Hecker to turn over his $9.5 million twin-engine business jet for allegedly defaulting on nearly $12.4 million in loans.

Gelco Corp., a subsidiary of GE Capital Corp., filed the lawsuit in Minneapolis against Den-Star of Minnesota, the entity Hecker used to buy the Bombardier Challenger aircraft. The lawsuit, made public Wednesday, says Den-Star borrowed $12.8 million to buy the plane in August 2007, then borrowed $357,196 against it in the next couple of months.

Gelco and GE Fleet Services sued Hecker and four of his businesses in federal court earlier this month for allegedly defaulting on $7.2 million in car leases Hecker personally guaranteed.

The latest suit comes about a month after Chrysler won a $477 million default judgment against Hecker and several weeks after Ford won a $3.15 million award. Last month, Hyundai Motor Financial sued Hecker, alleging he defaulted on the $104 million he used to acquire 4,500 rental vehicles.

Hecker, his spokesman and his attorneys could not be reached to comment on the latest legal action.

Gelco says Den-Star failed to make a payment on the aircraft loan in February and missed installments due on the subsequent notes in April. On April 16, it notified Den-Star and Hecker of the default and demanded payment of $12,380,049, with interest accruing at 18 percent a year.

Hecker signed the loan documents as a guarantor, as president of Den-Star Management Inc., and as chief manager and president of Den-Star of Minnesota.

Beth Bonell, vice present of global restructuring solutions for GE Capital, said in a sworn statement that the alleged default entitles Gelco to repossess the aircraft. But she said "Den-Star has failed and refused to relinquish possession of the aircraft to Gelco."

Hecker's plane, a Bombardier Challenger 601-3A-ER built in 1993, is now appraised at $9.5 million and is losing value through depreciation and wear and tear, according to Gelco's lawsuit.

Alexander Terras, an attorney with Reed Smith in Chicago who represents Gelco, declined to comment Wednesday.

It's unclear who, if anyone, represents Den-Star. Timothy Thornton, an attorney with Briggs & Morgan who represents Hecker in some matters, said Wednesday he didn't know anything about the lawsuit. He said even if he did, he would have nothing to say. A call to the Denny Hecker Automotive Group was referred to a spokesman, who could not be reached.

This month, Hecker defense attorneys asked to withdraw from the Chrysler lawsuit because they had not been paid. And U.S. District Judge Susan Richard Nelson let attorneys with Briggs & Morgan withdraw from an older case because Hecker had no money to pay them.

As recently as a year ago, Hecker was one of Minnesota's largest auto dealers, claiming $6.8 billion worth of auto sales and service. Since then, he has shut or sold 25 of his 26 new and used car dealerships. He sold the assets of his bankrupt Advantage Rent A Car business in April to Hertz Rent a Car for $30.2 million.

Dan Browning • 612-673-4493