Judge scolds Hecker for scant financial disclosures

Rochelle Olson

Nov. 7, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- Former car dealer Denny Hecker faces potential court sanctions if he doesn't provide sworn testimony fully disclosing his finances, a judge said Friday in an order critical of Hecker's previous disclosure in his divorce case.

"Hecker raises far more questions than he provides answers," Hennepin County District Judge Jay Quam wrote of the financial claims that the bankrupt dealer released Monday.

Quam demanded complete -- and sworn -- answers from Hecker by Nov. 13. The judge is trying to determine whether Hecker should be compelled to pay $7,500 a month in support to his estranged wife, Tamitha Hecker, and their two children, ages 14 and 8. Tamitha Hecker is seeking spousal support under what she claims is a valid agreement signed by the two during their marriage. Hecker and his lawyer, Bill Skolnick, claim the agreement is void and that Hecker is unemployed and without the means to pay her.

At a hearing on Oct. 22, Quam gave Hecker two weeks to submit a detailed accounting of his personal finances since he filed for bankruptcy in June claiming $18 million in assets and $767 million in debts. Hecker got the deadline extended a week, and his submission was made public earlier this week.

Tamitha Hecker's attorney, Becky Toevs Rooney, said she'll file a response Monday detailing numerous discrepancies between what Hecker claims for income and bank accounts in his divorce case, and what he claims in filings with the U.S. bankruptcy case.

In the divorce filing, Hecker outlined 12 sources of income, including $25,000 through four separate "consulting fees" and $25,000 for "reimbursement of expenses." He listed $125,155 for cashing out a 401(k) fund and a $100,000 loan from LKMCD Properties, an entity created by the new owner of Inver Grove Heights Toyota.

He got $50,000 in loans from Ralph Thomas, who hired Hecker in the 1980s to manage his Minneapolis Auto Auction. Thomas later sold the business to Hecker and Walter Bush.

Quam called Hecker's disclosure "woefully short." Hecker has been similarly rebuked in federal court for failing to provide a full accounting of his assets.

In his order, Quam wrote that he wanted to know not only how much money Hecker received, but how much he has and what he spent it on since he filed for bankruptcy in June.

On the first count, Quam said Hecker claims to have received $230,000 since his bankruptcy filing. "This is not an insignificant amount for one who claims to be unable to pay maintenance" to his estranged wife, the judge wrote.

The judge demanded documentation of the termination of the 401(k) plan. He wrote that Hecker "has provided nothing that would suggest that the 401(k) is not a marital asset," or that it is somehow exempt from state law regarding marital assets.

Quam asked for an accounting of how that money has been spent and said that if any money remains, it should be transferred for Toevs Rooney to put in escrow pending further court order.

On the issue of how much money he has, Quam said Hecker made "no response."

Regarding how Hecker has spent his money, the judge wrote that Hecker's "response is better than nonexistent, but not by much."

Quam mentioned some expenses and wire transfers that have led him to "have concerns about Mr. Hecker's credibility with respect to financial matters."

He cited a couple of dozen expenditures that were in detailed court documents not currently public. Among them: $2,078 to "Scoop," a clothing store in Las Vegas on Aug. 24; $5,000 to the Mirage Hotel and Casino on Aug. 26; $6,500 to Northstar Aviation Insurance on Sept. 6; $1,547 to the Lafayette Club on Sept. 25; and $960 to the Wayzata Country Club on Sept. 30.

"Given the claims Mr. Hecker is making about his financial situation and his inability to pay maintenance, these expenses are certainly questionable. Whether he likes it or not, the law places a higher obligation on Mr. Hecker to support his soon-to-be ex-wife than the Mirage Hotel and Casino," Quam wrote.

The judge noted that Hecker appeared to have transferred $142,000 out of his accounts without documenting the purpose for the transfers.

If Hecker doesn't submit a more complete accounting under oath by Nov. 13, the judge warned that he would impose appropriate sanctions.

Toevs Rooney said Hecker's divorce disclosure mentioned only one bank account, for his new consulting business, New Dimensions Advisors. Toevs Rooney noted the disclosure didn't mention the two dozen bank accounts Hecker listed in his bankruptcy filing disclosure in September. Similarly, she said the New Dimensions account wasn't revealed to the federal court. "One of our concerns is we have no reason to believe his financial activity has been limited to his New Dimensions account," Toevs Rooney said.

She also said Hecker failed to provide a real accounting of where he spends his money.

In addition to bankruptcy, Hecker is the target of a federal criminal investigation. He continues to live in Minnetrista with his mistress, Christi Rowan.

Rochelle Olson --612-673-1747

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