Hecker's balance sheet: All outgo, no income

Denny Hecker's personal financial documents for the past three months showed Wednesday that he's $1.5 million in the red, primarily to lawyers, and doesn't appear to have ongoing income other than loans from friends.

Also Wednesday, the federal trustee in Hecker's bankruptcy case sued two of his longtime companies, claiming he used them recently to hide motorcycles, cars, boats and other assets.

Hecker's latest release of financial data came in his divorce case, in response to an order issued Tuesday by Hennepin County Judge Jay Quam, finding Hecker in civil contempt of court. Quam ordered Hecker to reveal his full financial information or risk going to jail for 90 days.

Hecker disclosed that he received $200,000 from Walser Auto Group as part of a business deal on Dec. 1. That money is the focus of a motion seeking sanctions against him for failing to disclose income during his divorce from Tamitha Hecker.

He listed $201,500 in personal loans, mostly from Ralph Thomas, Hecker's friend and former associate from the early days at the Minneapolis Auto Auction. He also claims loans from James Plummer and from Jim Gustafson, a former employee under investigation.

Hecker's disclosures don't answer Quam's demand for the source of the $125,000 Hecker recently used to pay back a retirement account he drained shortly after filing bankruptcy in June 2009.

In an interview, Hecker declined to discuss that money, saying, "I'm not sure that's going to be addressed in public."

He said that as of last week, he owed $500,000 to criminal defense lawyer Bill Mauzy, $350,000 to Fredrikson & Byron, $250,000 to Skolnick & Shiff and $50,000 each to Halberg Criminal Defense, and Kaplan Strangis and Kaplan.

On Dec. 1 he paid $25,000 to live-in girlfriend Christi Rowan for household expenses for the previous two months, then $30,000 to her for such expenses through Feb. 17.

In December, Hecker also paid $13,000 to Bill Prohofsky, Tamitha Hecker's former stepfather, who recently killed himself.

In federal court, bankruptcy Trustee Randy Seaver asked permission to liquidate personal property owned by Northstate Financial Corp. and Rosedale Leasing LLC. Seaver called the entities Hecker's "alter egos," whose "purported personal property ownership existed solely to protect assets" from the court.

The court shouldn't recognize Hecker's "corporate fiction," he argued, because that "would accomplish a fraudulent purpose, operate as a constructive fraud and defeat strong equitable claims."

In a separate action on Wednesday, Judge Robert Kressel granted Seaver's motion to sell Hecker's Jacob Holdings of Nestor Falls Inc. to Shady Roost Holdings for $100,000. Jacob is one of 100 corporations Hecker formed while operating an empire that consisted of 26 auto dealerships, Advantage Rent a Car, Walden Fleet Services, Rosedale Dodge and other firms. Annual sales estimates reached $6.8 billion about four years ago.

Hecker's bankruptcy filing claimed $18.5 million in assets and $767 million owed to hundreds of creditors. Seaver and lead creditor Chrysler Financial repeatedly accused Hecker of stalling, withholding documents, lying and hiding assets.

Hecker reached a settlement with Seaver last week, agreeing to not have any of his debt forgiven. But Hecker's concerns have shifted from debt to freedom.

He faces federal criminal charges of money laundering, wire fraud and bankruptcy fraud for allegedly procuring auto loans from Chrysler Financial and other lenders with the help of altered or fraudulent documents.

He pleaded not guilty to fraud charges last month and is scheduled to be arraigned Tuesday on a second set of charges.