Denny Hecker can keep his mouth shut if he wants to, but he has run out of time to turn over records sought by Chrysler Financial, a U.S. bankruptcy judge ruled Wednesday.
Judge Robert Kressel accused the former auto dealer of stalling and said the Constitution's Fifth Amendment protection against self-incrimination does not protect him from his longtime former financing partner's demands to provide business documents related to a civil lawsuit.
Hecker's attorney argued that Chrysler was remiss in answering some questions, too, but the judge called such arguments "schoolyard" jockeying. Kressel ordered Hecker to pay $1,000 in attorney fees to Chrysler Financial for wasting its time by forcing it "again and again" to request documents as part of what should have been a standard discovery process.
"The discovery provided [by Hecker] ... was inadequate on its face," Kressel said, adding that Chrysler Financial had no choice but to seek help from the court.
Hecker defaulted on $477 million to Chrysler Financial, which is suing him for allegedly falsifying loan documents in 2007. Hecker denies the allegation.
As part of the discovery process, Chrysler Financial turned over 50,000 pages of documents to Hecker but so far has received vague answers to questions and only about 100 pages of requested documents.
"He stiffed us. He stiffed the court," said Chrysler Financial attorney Howard Roin. He said Hecker put Chrysler in the "embarrassing position" of providing full discovery while "getting nothing in return."
Responding to Chrysler Financial's demands for information, Hecker filed documents last week invoking his right not to incriminate himself.
Kressel gave Hecker attorney Bill Skolnick until Jan. 19 to produce answers and documents or face sanctions. Kressel also ordered Hecker to produce a detailed list outlining the date and time of each e-mail Hecker claimed was protected by attorney-client privilege.
Chrysler Financial obtained a disc containing some 30,000 pages of Hecker's personal and business e-mails this fall from Hecker's former assistant, Cindy Bowser. In November, Hecker said the e-mails were stolen and were privileged communication and demanded that the court block Chrysler from viewing them. Kressel said Wednesday that Hecker had to follow set rules for listing privileged e-mails so a contractor could identify which e-mails Chrysler should receive.
Also Wednesday, U.S. District Judge Paul Magnuson denied Hecker's appeal of an earlier order by Kressel that rejected Hecker's efforts to protect his property in Crosslake, Minn., from Chrysler Financial. Kressel had denied Hecker's claim that the multi-million-dollar property was his homestead, ruling that the property is owned by Jacob Properties of Crosslake, which is owned by Jacob Holdings of Minnesota. Hecker's attorneys had argued that the two business entities are merely alter-egos for Hecker, an argument Magnuson rejected.
Dee DePass • 612-673-7725