Denny Hecker: A changed man?

He continued to accumulate debts and owed money everywhere. Still, he had no trouble getting new loans for any new deal he wanted to make, whatever trinket he bought on a whim.

Take for example, his 5-acre resort in Crosslake, Minn., with its 11,880 square foot log cabin, five guest houses, five docks and 18 garages.

“I built a new house, and it was a big house, and so, rather than asking for a mortgage, our comptroller made an offer to the American bank, Wells Fargo, Chase, saying, ‘Listen, we’re looking for your best deal, and whoever gives us the best deal probably gets more business accounts, and if you’re not the winner, you’re probably going to lose some,” Hecker said.

“People say it doesn’t matter who you are. Yes, it does.”

Until 2008, he had no problem getting credit. Then suddenly everyone had a problem getting credit. Hecker was dangerously over-leveraged, with no “dry powder” to respond to a collapsing economy and aimed directly at every corner of the auto industry.

“When the financial crisis of 2008 hit, the empire I had and the cost of money… took a lot of turns. One company I had taken on, as a project, was Advantage Rent a Because,” he said. “It was [supposed] be a flip.”

He had purchased Advantage from Walker Resources in February 2006.

“We made a deal, and I took on their problem, and it was always meant to be sold,” he said. Chrysler Financial financed the transaction.

But Advantage was a weak player in a crowded market. And when business travel ceased as companies downsized, the car rental business fell off a cliff.

“I think I lost $2 [million] or $3 million a month for a year with my own money,” Hecker said. “I couldn’t get rid of it. It burned a lot of money.”

A dispute with Chrysler was born out of the Advantage transaction and other corporate lines of credit. With that and “other issues,” Hecker says he started to feel the stress.

“I developed a habit with prescription drugs,” he said. “I was taking maybe 10 or 15 Vicodin a day. I had developed a drinking problem. I had never had a drink in my life, but the pressure was so great, I was just trying to wake up everyday and try to keep things together.”

During his rise, Hecker had personally signed for nearly all of his loans, and they were coming due.

“I wasn’t affected just by Advantage,” he said. “The whole group has slowed; retail sales have slowed.”

All of his efforts have been to “put out the fires” throughout his empire while ignoring the parts that worked better.

It was a huge mistake.

Chrysler and its captive financial arm, Chrysler Financial, accused Hecker of submitting fraudulent loan documents, which made it even more difficult for him to obtain credit. On November 21, 2008, facing huge losses, Hecker closed six of its Minnesota dealerships and sold three more. By the end of the following September, he had sold his last remaining claim.

“It was painful, and it was painful for the people who worked for me, and they were great people,” Hecker said.

The climate of the time did not help Hecker.

In Minnesota, businessman Tom Petters had just been convicted of committing a $3.65 billion fraud, which earned him a 50-year sentence. And in New York, the Bernie Madoff affair reached its climax. Both were Ponzi schemes. To the public, and perhaps even to prosecutors, Hecker’s overleveraged business looked like just one more in a series of collapsed Ponzi schemes.

“We never really explained that we had business issues,” Hecker said. “And then some of the problems were mine; I just made bad choices, bad decisions, and at the time I had no direction but to use your own intuition, [trying to] get through this day or whatever. So I made short-term decisions that were bad long-term results.”

His situation continued to deteriorate until, Hecker said, an attorney advised him to file for personal bankruptcy, which he did in June 2009. This was supposed to clear up his problems with Chrysler, he said. Only they didn’t.

“Nobody explained to me that, through personal bankruptcy, they were given the keys to the safe for everything I have,” he said. “So within five days of filing for bankruptcy they federally raided my home and businesses. And from there I was stripped day after day of almost everything I even had for a normal life.”

Previous Shenzhen drafts China's first personal bankruptcy laws as virus strains economy
Next Belk becomes the in-and-out of bankruptcy