business

Finally, some good news for 1,000-plus investors who sunk their fortunes into what authorities say was a far-reaching Ponzi scheme orchestrated by Minneapolis money manager Trevor Cook.

An unidentified bidder has offered $1.6 million for the historic Van Dusen mansion at 1900 LaSalle Av. S., where Cook and some of his colleagues kept offices and threw wild parties in the past couple of years. That's a far cry from the $2.6 million in cash that Cook paid three years ago. But given the slow housing market -- especially for luxury homes -- and with taxes, utilities and caretaker bills for the property mounting at $12,000 a month, the offer came as a relief to R.J. Zayed, the court-appointed receiver.

Zayed explained to Chief U.S. District Judge Michael Davis, who's overseeing the receivership, that he got an oral offer for the 118-year-old building that Cook called "the castle." But before it can be accepted, Zayed must publish notices in local newspapers soliciting competing bids. To bump the offer, interested parties must bid at least $1,756,000, he said.

The property carries an "onerous tax burden" of $62,000 a year, Zayed said. Together with other expenses it represents a tremendous drain on the proceeds in the receivership.

Zayed told Davis that the receivership's cash accounts had $1,844,000 when he was appointed in November. Since then, they've swollen by $2,522,000, for a total of just over $4,366,000. To date, the receiver has spent $973,000 investigating, securing and liquidating property for the receivership, Zayed said.

For instance, Computer Forensic Services will be paid $39,599.68 for work it did in January to recover data from 86 hard drives.

"We were able to get some very good leads that led us to overseas accounts" containing $1 million, Zayed said. Those assets have not yet made their way into the receiver's coffers.

Zayed updated the judge on some property in Panama that Cook had bought, allegedly with investors' money. He said property for a planned condominium tower cost $3.5 million, $2.86 million of which came from investors. Zayed said a deal has been reached with the other owners to sell that property and repay the investors' share. Any profits on the sale would be split, he said.

About $10 million of the investors' money went to buy land for a mammoth casino that Cook and his partners planned to build in Panama City, Zayed said. The status of that property remains uncertain, though. Initially, the sellers of that land claimed that Cook and his group had defaulted on the purchase agreement, suggesting that the money would not be returned. "But there's been some movement on that," Zayed said.

Property that Cook owned on an island in Rainy Lake near Fort Frances, Ontario, was worth more than initially thought -- about $500,000, he said. It has a partially finished cabin on the land, Zayed said, adding that he's weighing whether it would be worth it to finish the building before putting the property up for sale.

A recent auction of six cars traced to the receivership brought in $74,000, and an auction of personal property such as TVs, computers, a keg cooler, mini-fridges and some office knick-knacks brought $24,000, Zayed said.

Dan Browning • 612-673-4493