Tuesday, August 27, 2002
Ben-Mar settlement blocked
Tony Erpenbeck holding out for more
By James McNair email@example.com
The Cincinnati Enquirer
After more than seven years of rounding up assets in the Ben-Mar Investments bankruptcy case, only one obstacle is blocking the partial payback of investors' money: a claim for a bigger share by one of the investors.
Tony Erpenbeck, a retired home builder and Crestview Hills resident, is holding out for a sum larger than the $43,730 he and his wife, Phyllis, are due to receive in the initial disbursement of U.S. Bankruptcy Court trustee Richard Nelson. The couple invested $497,000.
Mr. Nelson is ready to write checks totaling $1.15 million to cover 345 claims, but he must first persuade the court to approve his repayment plan.
Tony Erpenbeck is better known these days as the father of Bill Erpenbeck, whose home building company collapsed in April, prompting an FBI bank fraud investigation that is still under way. |
Tony Erpenbeck owned 1 percent of the Erpenbeck Co. and provided financial assistance in a failed effort to prop it up.
Various members of the Erpenbeck family stand to receive about $150,000 - from an original investment of $1.7 million - if the court approves the plan as is.
Ben-Mar Investments folded in 1995 after receiving more than $13 million from investors, mostly Northern Kentuckians, who had no idea their money was being used to bet on the direction of the stock market. One of its principals, Mark Gatch, has already served a 2 1/2-year prison sentence, while the other, Benjamin Schmidt, was indicted last week for bankruptcy fraud and obstruction of justice.
The Ben-Mar collapse cost Mr. Schmidt his three-story mansion in Crestview Hills and left him in financial ruin, but he continued to receive support from his friend and neighbor - Mr. Erpenbeck. According to testimony given by Mr. Schmidt in bankruptcy court, Mr. Erpenbeck lent him his car from time to time and helped bankroll a Schmidt business venture in Pigeon Forge, Tenn.
Mr. Erpenbeck's assistance extended to the events that led to last week's criminal charges against Mr. Schmidt. The U.S. Attorney's office in Cincinnati accused Mr. Schmidt of stripping appliances, fixtures, moldings and shrubs from the $680,000 house he surrendered to the bankruptcy trustee in 1998. Even though Mr. Erpenbeck was trying to recover $497,000 from the insolvent Ben-Mar, he allowed Mr. Schmidt to store items removed from his house - including chandeliers and drapery hardware - in his basement.
THE FIRST PAYOUT
What the biggest victims in the Ben-Mar Investments claimed in damages and what they will receive in the first court-sponsored return of investors' money: |
Ken Anderson $86,346 $7,598
Lawrence Bowling 212,596 18,707
Bruce and Kathy Coslet 142,184 12,511
Richard Dean 488,961 43,025
Basheer David 125,047 11,003
L.R. Deininger 195,817 17,230
E.H. Roeding Insur. 274,226 24,130
The Erpenbeck Co. 135,000 11,879
Bill Erpenbeck 683,491 60,142
Tony Erpenbeck 496,975 43,730
Gary Erpenbeck 113,750 10,009
J. Thomas Feagan 155,862 13,715
Arthur Fisher J. 254,034 22,353
Kenneth Heil 200,000 17,598
Paul Hemmer Constr. 110,000 9,679
Dave Lannigan 265,698 14,580
Thomas Lonneman 225,000 19,798
Ann Marie Mergard 264,316 23,258
D.H. Mergard 277,870 24,450
Tim & Kimberly Moore 256,961 22,611
Harry Oelerich 142,519 12,541
Dallas Sandlin 630,000 55,435
E.C. Vermillion 380,310 33,464
Martin Wade 467,227 41,112
Waterfront Properties 217,060 19,100
Robert Windhorn 146,466 12,888
Source: Richard Nelson, U.S. Bankruptcy Court trustee
Tony's place was free, so that's where I put most everything, Mr. Schmidt said in a June 1998 deposition.
The Erpenbecks were among the biggest losers in the ill-fated Ben-Mar scheme and aren't ready to settle for the $43,730 that Mr. Nelson proposes they receive, although it is in proportion to the payouts to others. In his formal objection, Cincinnati lawyer Joseph Dehner said certain amounts he (Mr. Erpenbeck) lost had not been included in the totals known to the court.
Mr. Dehner did not specify an amount. He was out of town Monday and did not return a telephone call for comment.
Mr. Nelson said Monday he would oppose Mr. Erpenbeck's request for more money.
He's getting, in my opinion, the same percentage as everyone else, based on the amount of his allowed claim, Mr. Nelson said.
The trustee raised the $1.15 million by liquidating bank accounts and receiving the proceeds of asset sales, including those of Mr. Schmidt's and Mr. Gatch's homes. The amount is less than nine percent of the $13.1 million that people invested.
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