The bankruptcy estate of former auto-mogul Denny Hecker could get $400,000 from VISIONBank as part of a settlement which still needs to be approved by the bankruptcy judge.
The deal, if approved by a judge early next month, would be one of the largest amounts of money recovered by the bankruptcy trustee since the former Twin Cities auto dealership mogul filed for bankruptcy protection in June 2009, owing $767 million.
"We were pleased that we were able to reach a full and final amicable settlement with the trustee, and it comes with a full release of any additional claims that the trustee may ever have against the bank," said Cynthia Hegarty, legal counsel for VISIONBank.
VISIONBank agreed to pay in three installments over the next two years as a result of trustee Randy Seaver's claims that the bank received preferential treatment over other creditors to Hecker's estate. Hecker made debt payments to the bank of more than $3.1 million when he was insolvent in the months leading up to his bankruptcy filing, according to the settlement.
Ralph Thomas, part owner of VISIONBank is also a longtime friend of Hecker and is helping him with his legal costs and other expenses, giving the bankruptcy trustee more reason to believe that Hecker made the payments in bad faith knowing that he would be filing bankruptcy. VISIONBank is also one of several creditors who accused Hecker of obtaining loans fraudulently, but they dropped their claims after Hecker gave up on his bid to have his debts forgiven in bankruptcy.
Hecker is currently in jail awaiting sentencing on federal fraud changes and could face up to ten years imprisonment.