The trustee wants to liquidate items from Hecker's Crosslake homes, but someone changed the locks.
Denny Hecker and his friends must know by now that the trustee in his bankruptcy case is running short of patience.
In case they needed a reminder, Randall Seaver smacked them with another lawsuit on Sunday demanding -- once again -- that they either fork over some money or relinquish control of the former auto mogul's personal property so it can be liquidated at auction.
At issue are the furnishings and household goods in and around three "substantial properties" on Crosslake in northern Minnesota. Those properties were purchased by a former Hecker entity known as Jacob Holdings, and Seaver won a judgment March 3 determining that the goods belonged to his bankrupt estate.
Seaver's attorney, Matthew Burton, said Monday that there was a deal to sell the goods to Hecker, but he didn't come up with the cash. Burton estimated the goods are worth more than $100,000.
Hecker, once one of Minnesota's largest car dealers, faces 25 federal charges, including bankruptcy fraud, mail fraud, conspiracy and money laundering for allegedly hiding assets from the court and obtaining loans from Chrysler Financial and other lenders with false or incomplete information. His trial is scheduled for October.
According to Seaver's latest lawsuit, Hecker's friends, James and Jamie Gustafson, have taken control of the Crosslake properties. Asked what that meant, Burton said, "My understanding is that the locks have been changed." Some docks and lifts that Seaver wants to sell also have been put back into the water, Burton said.
Burton said he's still open to negotiating a settlement with Hecker if he can raise cash from disinterested parties to buy the property.
Brian Toder, Hecker's criminal defense attorney, said he didn't understand why Seaver filed the complaint. "I thought we had an understanding to resolve that matter before the weekend," Toder said. "I think he filed it thinking that we were going to drag our feet, but that's not the case."
James Gustafson's attorney, Steven Meshbesher, called Seaver's complaint "inappropriate" because the issue is between Hecker and the bankruptcy court. "If Gustafson ever used the property, it was legitimate," he added.
Seaver asked the court to order Hecker and the Gustafsons to turn over the personal property and to enjoin them from removing, disposing or encumbering the estate's property.
James Gustafson is a former employee of Hecker's auto leasing operation. He has not been charged, but is under investigation. Seaver has uncovered a check and other documents allegedly showing that Gustafson helped Hecker secretly funnel money from the trust funds of Hecker's children and grandchildren, and found that he also paid Hecker's bill at an Arizona golf club.
On Monday, the Eighth U.S. Circuit Court of Appeals ruled that a Minnesota district judge would consider Gustafson's appeal of a bankruptcy court order that he turn over documents to the trustee and be interviewed. Gustafson says it violates his right against self-incrimination.
Also Monday, Seaver filed an "expedited motion" for an order authorizing the auction of a number of Hecker vehicles -- including motorcycles, cars, watercraft, trailers, ATVs, golf carts -- and a leaf blower. If approved, the auction by Fred W. Raddle & Son in New Germany, Minn., would take place May 25.
Dan Browning • 612-673-4493