State Sen. Sean Nienow is relieved of $840K in debt

A Minnesota state senator who filed for bankruptcy after reneging on a six-figure small-business loan was relieved of $840,000 in debt last year.

The Chapter 7 bankruptcy case of Sen. Sean Nienow, R-Cambridge, officially closed in October, just three months after Nienow and his wife, Cynthia, filed. In court filings, the couple claimed they owed $930,000 to creditors, but had only $122,000 in assets — almost all of which is comprised of his home, which he has mortgaged twice.

The bulk of the debt was owed to the U.S. Small Business Administration, which in 2009 loaned the Nienows $613,000 to buy National Camp Association Inc., a now-defunct guidance and referral service aimed at helping families find camps for children, among other services.

The loan was personally guaranteed by the Nienows, but they stopped making payments in 2010. The federal government sued last year, and a $748,000 judgment was entered against the Nienows. None of the debt was paid.

Nienow said Tuesday that despite the discharge of his debt, he intends to try to make payments to his creditors. The dozen listed are comprised largely of multiple credit card and mortgage companies. The two-time state senator said his financial troubles don't dilute his message of fiscal conservatism.

"Businesses succeed and don't succeed all the time. If people don't take risks with businesses we don't have an economy," he said. "On paper, everything worked. Everything looked responsible. If it didn't, the bank wouldn't have approved the loan."

Nienow, 46, served in the state Senate from 2003 through 2006.

After being defeated for re-election, he won back the seat in 2010, and won again in 2012. His official Senate biography lists his occupation as a consultant. He makes $31,000 annually as a senator.

The Nienows, who have seven children, listed on court documents a $2,600 monthly income.

In 2011, National Camp Association's previous owner sued Nienow, shedding light on how he spent the SBA loan, but not on what happened with the organization.

Jeffrey Solomon, of New York, alleged in the suit that Nienow failed to repay $78,000 in loans for the sale of National Camp Association.

According to the suit, Nienow paid Solomon $621,000 for the rights to the company, with a promise to pay two additional loans of $30,000 and $48,000. Solomon said when no payments were made on the first note, he made multiple attempts to collect before suing Nienow in Isanti County in 2011.

In a 2011 letter sent to Solomon's attorneys, Nienow accused Solomon of failing to transfer $100,000 in "receivables" to him as part of the deal — an allegation he reiterated Tuesday.

Nienow said Solomon verbally promised him that the loans would be forgiven. Last June, an Isanti County judge entered a summary judgment against Nienow for $30,000 plus interest and $7,000 in attorney's fees and expenses.

Solomon is listed among Nienow's debtors in the bankruptcy filing. According to the Minnesota Secretary of State's office, the business was shuttered in August 2012.

Court filings show Nienow listed National Camp Association among his property, but added that "there are no remaining assets." Other listed property included $1,400 in checking and savings accounts, two vehicles valued at $3,250 and a 1970 Lund boat valued at $100.

In July, bankruptcy trustee J. Richard Stermer discharged a debt of $842,632. The Nienows were ordered to take a course on financial management, which court documents show they completed before the case closed.

Abby Simons • 651-925-5043