A pair of recent lawsuits seeking more than $5.5 million from Denny Hecker indicates deepening legal and financial troubles for the deposed Twin Cities auto king.
Hecker's rental car operation is mired in bankruptcy proceedings, and his auto dealerships are embroiled in several lawsuits with the automakers. He recently sold two dealerships to the Pohlad Group.
Now, JPMorgan Chase Bank has filed a lawsuit against Hecker in Hennepin County District Court seeking immediate repayment of $3 million in loan proceeds, plus interest. The Columbus, Ohio-based company filed the suit last week claiming Hecker had defaulted on the loan and a related agreement.
Meanwhile, Fifth Third Bank filed a lawsuit earlier this month seeking to foreclose on a mortgage that Hecker signed for what appears to be a condo development in Bonita Springs, Fla. The lawsuit, which is pending in U.S. District Court in Fort Myers, Fla., claims that Hecker and several partners in Terrace at Windsor LLC owe the bank $2.5 million, plus fees and interest accruing at the default rate of 18 percent a year.
According to the Hennepin County lawsuit, in April Hecker borrowed $3 million from Chase. As part of the deal, Hecker agreed to maintain minimum liquidity of no less than 1.5 times the outstanding principal balance of the loan. The suit says he also agreed to maintain his primary banking relationship with Chase. The bank contends that he defaulted on the loan by failing to comply with those covenants.
On Nov. 27, Chase exercised its contractual right to accelerate payment of the loan, the lawsuit says. It says Hecker has failed to pay the amounts due or to make monthly interest payments. As of Feb. 2, the outstanding balance and principal owed by Hecker was $2.9 million, plus $15,216 in interest. The bank also seeks expenses and attorneys fees.
The defendants in the Florida lawsuit are Hecker, five other individuals, Terrace at Windsor, and RWC Inc., a Florida company that may have a subordinate lien on the property securing the note. The partners initially borrowed $3.2 million for the property just north of Naples in December 2005.
The suit says that on May 31, Hecker signed an unconditional guarantee to repay the note. The bank says the mortgage went into default Sept. 30, and as of Nov. 10, the partners still owed more than $2.5 million.
Hecker's attorneys could not be reached Friday. In a written response to the Florida lawsuit, they denied wrongdoing and said any damages or losses are the fault of third parties over whom "Hecker has no control."
Hecker has not yet responded to the Hennepin County lawsuit, assigned to District Judge Deborah Hedlund.
Hecker also is embroiled in disputes with Chrysler Financial. He sued it for pulling his lines of credit at his dealerships. Then in January, Chrysler Financial countersued, claiming breach of contract and seeking $550 million in unpaid loans, including $50 million lent to him personally. In December, Hecker crashed his SUV, hitting a utility pole in Plymouth. He spent two days in the hospital.
Staff writer Dee DePass contributed to this report. Rochelle Olson • 612-673-1747
