Auto dealer Denny Hecker has asked the U.S. Bankruptcy Court to change the venue of his bankruptcy filing from Duluth to Minneapolis because the original venue was "inconvenient" and "burdensome" to most involved in the case.
Hecker filed for personal bankruptcy protection on June 4, listing his primary address as an $8.92 million Cross Avenue vacation home he owns on Cross Lake north of Brainerd instead of one of the two homes he owns in Medina. According to records with the county assessor's office, Hecker owns several other adjacent parcels on Cross Lake, including two worth $1.4 million.
The Cross Avenue address listing in Crosslake is what prompted the court to assign Hecker's bankruptcy case to its Duluth Division, Hecker's attorneys wrote. They noted however, that the bankruptcy trustee's office is in Burnsville, the trustee's attorney's office is in Minneapolis and Hecker's attorneys and businesses are also in or near Minneapolis. The filing also said that Hecker now is renting a home in Hennepin County under a 90-day lease.
Mark Kalla, a bankruptcy attorney at Dorsey and Whitney, said that Minnesota bankruptcy law usually allows filers to keep their primary residence, provided the owner has an equity stake of $300,000 or less. Should the equity stake be higher, the court would require the property to be sold.
It is not known what Hecker's equity stake or mortgage is for the Crosslake property he is claiming as his primary residence.
Even if Hecker has a huge mortgage and only $300,000 worth of equity in the house, "it begs the question of how does someone who is in bankruptcy plan to keep a $9 million house? You still have to service the debt," said George Singer, a bankruptcy attorney at Lindquist and Vennum.
Hecker's bankruptcy filing followed the closing of 25 of his 26 auto dealerships. He reported owing as much as $1 billion to as many as 1,000 creditors. Thursday, the court approved the hiring of an auctioneer in the case.
Last week, the State Patrol raided six of Hecker's businesses and homes as part of an investigation into possibly unpaid sales taxes on customer auto sales. Hecker denies doing anything wrong.
