Three contracting firms owed more than $400,000 by the Erpenbeck Co. took the extraordinary legal step Tuesday of banding together to force its former president, Bill Erpenbeck, into personal bankruptcy.

Erpenbeck

        The so-called involuntary bankruptcy petition was filed in U.S. Bankruptcy Court in Lexington. Seeking to recover a total of $405,853 in past-due debts are JP Flooring Systems of West Chester, Groundmasters Inc. of Cincinnati and George R. Trumble Inc. of Florence, all of whom say Mr. Erpenbeck personally guaranteed his company's debts to the contractors.

        By filing the claims against Mr. Erpenbeck, the group hopes to tap his personal assets. If U.S. Bankruptcy Judge William Howard determines that he is insolvent, Mr. Erpenbeck's financial affairs could fall to a court-appointed trustee.

        “He's up to his eyeballs in liens,” said Randy Slovin, a Symmes Township lawyer representing JP Flooring and Groundmasters. “We're hoping that a trustee will be appointed to look at his transactions to see if there's anything that can be set aside.”

STORY ARCHIVE

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INVESTIGATION

If you have any additional information on the business dealings of the Erpenbeck Co. or Peoples Bank of Northern Kentucky - or on the involvement of any parties not yet identified in our coverage - please email Enquirer business reporter James McNair at jmcnair@enquirer.com or Kentucky Enquirer reporter Patrick Crowley at pcrowley@enquirer.com.

        While Erpenbeck Co., once a prominent home builder in Edgewood, grapples with millions of dollars in obligations to banks, subcontractors and customers, Mr. Erpenbeck's financial condition is less certain. His large house in Crestview Hills is assessed at $1.3 million but is in foreclosure. The federal government filed a civil forfeiture claim against the house and a condo in Fort Myers, Fla., saying the money used for their purchase was traceable to bank fraud.

        Mr. Erpenbeck's lawyer, Glenn Whitaker of Cincinnati, was caught off guard by the bankruptcy petition.

        “I haven't seen it,” he said. “I don't even know what debts are being referred to.”

        Mr. Erpenbeck has kept a lower profile since ceding control of his company to his younger brother, Jeff Erpenbeck, in March. The FBI is investigating an elaborate scheme of Erpenbeck home-sale proceeds being diverted into company accounts at Peoples Bank of Northern Kentucky from 1999 into early 2002.

        Bill Erpenbeck has spoken with the FBI on several occasions, but has not been charged with any crimes.

        Peoples Bank, weakened by $5 million in Erpenbeck loan write-offs and related legal exposure, announced last week that it will sell its assets and deposits to Bank of Kentucky. After the sale is approved by shareholders and regulators, Peoples would exist only for the settlement of claims.

        Lori Schlarman, a Covington lawyer who represents George Trumble Inc., said it was important to prevent Bill Erpenbeck from seeking protection from more debtor-friendly bankruptcy courts in Florida.

        “We want him in a Kentucky court with a Kentucky judge who understands the situation so that we can monitor it closely for assets and recoveries,” Ms. Schlarman said. “We want to make sure that assets are found so that people can get their money.”

        If a trustee is appointed, she said, other creditors with personal claims against Mr. Erpenbeck will be asked to submit those claims in court.

        JP Flooring, which sold hardwood flooring and carpeting to Erpenbeck Co., claims an unpaid debt of $193,359. Groundmasters, a landscaper, holds a Hamilton County civil judgment of $62,499 against Erpenbeck Co. and Mr. Erpenbeck. George Trumble, a concrete contractor, claims $150,000 in the bankruptcy filing.

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