Saturday, February 19, 2011

Koenig Court Proceedings: Affidavits and Answers

Post and photo by the Hawthorne Hawkman

When we last touched on Paul Koenig's court proceedings, he had just transferred at least a half-dozen properties to his name, and then shifted title to a new LLC, Komo Group.  Minnwest alleges, and I agree, that such a purchase and transfer didn't even satisfy the basics of title transfers and foreclosures in Minnesota.  Koenig and at least one anonymous commenter here feel otherwise.

Last week I had some spare time and was able to swing by the Government Center again to peruse more docs.  We start with the affidavit of Toni Warren, who states for the record that...

...Toni Warren is a property manager for Neupoint Management Solutions LLC.  On June 25, 2010 Neupoint received notification from Kaizen, acting on behalf of Koenig's Komo Group to turn over properties and rent to Kaizen.  Kaizen also gave tenants only one day's notice regarding instructions to send rent to them instead of Neupoint, telling renters on June 30th to pay Kaizen.  Obviously this caused quite a bit of confusion, and I speculate that the last-minute notification to tenants on public assistance was intentional.  Kaizen also instructed the city to turn over Section 8 payments to them.

The big surprise was that Minnwest's restraining order asking for rents to be withheld from Kaizen or Komo was denied.  However, in reading that document, the denial may actually signal good news for Minnwest.  The defendants have agreed to turn over all rents to the plaintiff, although it's not clear if they will do so immediately, or retroactively when they lose the case.

Yes, I said "when," not "if."  That's because of what the TRO denial says:

"Plaintiff is likely to succeed on the merits of some or all of its claims.  There is significant evidence that:  Plaintiff holds title to the Property, Plaintiff foreclosed the mortgage on the Property, which was prior and superior to the Second Mortgage; Defendants failed to redeem the Mortgage during the redemption period as required by law, and Defendants have no colorable claim to ownership of the Property."  (Emphasis and link to Batman dancing added by this author.)

Finally, for now, we have the Defendants' answers to the Complaint.  In those Answer documents, the Defendants basically admit to the basic facts, such as "Minnwest is a banking corporation with a place of business in Eagan, Minnesota."  Any substantive claims regarding the Defendants' alleged actions are denied, and Koenig and his cronies have the gall to ask for the case to be dismissed with prejudice.

It is telling though, that Komo Group's Answer denies the statement in the Complaint that Komo Group is an LLC in Eagan with Koenig as its sole operator.  Komo also denies the statement that no party redeemed the Property from foreclosure.  Conversely, they also dispute the statement of Pamiko's redemption and transfer of the Property to Komo.

The same pattern of admissions and denials is followed for all Defendants (Komo, Koenig, Kaizen, and the Durkops).

We are now 1/3 of the way through the court documents.  More posts will follow as I am able to get downtown and retrieve more items.


  1. Good work! We can not let Koenig get any of these properties back, especially with his track record! Keep us up on the proceedings so if need be, we can come to the defense of Minn West Bank and get these properties in to the hands of responsible owners.

  2. This question pertains to your twitter feed. What exactly is a transfer of a Mpls advantage loan?

  3. The transfer of the Minneapolis Advantage loan in this case refers to a property that was transferred via quit claim deed. It's not clear from the information I have whether the Minneapolis Advantage loan was satisfied via that transfer or if it is in some level of default. Even if it's the latter, the program still shows tremendous signs of success.

  4. I can not believe that Minn West does not have an "assignment of rents" clause. They are extremely ignorant or have a bunch of dumb lawyers. In 20 years as a broker, I have never closed a loan that did not have this provision!


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