Post and photo by the Hawthorne Hawkman.
After trekking to downtown St. Paul and finding virtually nothing in Minnwest's Ramsey County civil case against Pamiko, I expected much of the same here in Minneapolis. Boy, was I wrong. The Hennepin County case has three file folders marked as full. (Hennepin rules prohibit the photographing of actual court documents, but the folders and stop markers are fair game. The other rule in play here is they only allow five documents to be copied at a time. More than five and you have to fill out a work request and then it takes a week to get done. Got to love bureaucracy.)
Now, because of the sheer volume of documents and the aforementioned rule, I picked five docs from the first file that seemed pertinent. We'll be playing catch-up as I'm able to obtain and review the documents. For instance, I can already tell you that Minnwest's temporary restraining order was denied, although I didn't read the denial to find out specifics yet. And in another filing, the plaintiffs eviscerate the Koenigs' maneuverings of properties between LLC's during the foreclosure process. I cannot WAIT to sink my teeth into that one.
The Complaint lists Minnwest Bank Metro as the Plaintiff, and the following defendants: Komo Group LLC, Kaizen Property Solutions LLC, Paul Koenig, Aaron Durkop, and Mary Durkop. Komo Group LLC had its office or at least a mailbox at 8632 Tamarack Village in Woodbury, the same address as Pamiko. The Complaint states, "Upon information and belief, Koenig is the sole member and chief manager of Komo." Kaizen Property Solutions sounded awfully familiar to me. Why does that name ring a bell? Oh, NOW I remember...
...that John Hoff and I removed their sign spam from the border of the EcoVillage. This would have been on Tuesday, January 12, 2010. Let's keep that date in mind as we progress through the court proceedings, and see if that matches up with any other suspicious activity by Kaizen and Pamiko. Kaizen has an address in McKinley, at 3201 3rd St N, #200. I'll have to pay them a visit one of these days and see if they're still around.
According to the Complaint, Minnwest made a loan for $2,500,000 to Pamiko on June 24, 2008. Pamiko defaulted, and Minnwest purchased the Property (capitalized Property refers to the total real properties used to secure the $2.5 million loan) through foreclosure on October 15, 2009. Exhibit B (link to document pending) details that list of properties. Neither Pamiko nor any other party redeemed the loan prior to foreclosure, and the redemption period ended on April 15, 2010.
On November 12, 2009 Pamiko transferred its rights to the Property to Minnwest, and a court-appointed receiver was in control and possession of the Property. After the redemption period, Neupoint Management Solutions LLC became the manager of the Property.
Then things get tricky. On May 19, 2009 Minnwest modified another loan with Pamiko with an original principal amount of $1,520,000 and amended the mortgage to add at least some of the properties from the above loan. Pamiko also defaulted on THAT loan on October 15, 2009, but apparently redeemed it prior to the end of a redemption period. Pamiko then transferred the rights to all of the properties under the second loan to Komo via quitclaim deed. This included the $2.5 million loan Properties. On June 21, 2010, Komo demanded that Neupoint turn over possession and all rents, etc. relating to the Property to Kaizen.
Let's take a step back from the court documents for a moment, shall we? Who in NoMi had conversations with Paul Koenig during the time he was losing the properties to foreclosure? And what did Paul Koenig say to you? (paraphrased) "Oh, all those houses that are run down and have problem tenants - I don't own them anymore. They were fine before, when I owned and managed them, but you know how it is. Big bank, little me."
Well, the whole time Koenig was busy coming to the neighborhood, blaming the bank for his crummy properties and worse tenants, Minnwest alleges he was busy transferring these properties TO HIMSELF and attempting to continue collecting rent. (Remember, he also let some of his Dream Homes go into foreclosure when owned by another LLC, with unpaid mechanics' liens, then purchased them post-foreclosure through Pamiko after the foreclosure wiped out the liens from unpaid workers.) This rent included Section 8 and other subsidized housing income, and fraudulent activity would threaten Minnwest's ability to maintain program eligibility. Koenig already declared personal bankruptcy on several levels of back taxes, then managed to dump the blame for falsifying public assistance on Dream Homes on his business partner David Kohlenberger. Let's see how he tries to get out of this one.