Randall L. Seaver – Fuller Seaver & Ramette

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Attorney Randall L. Seaver is a bit of a bloodhound when it comes to debtors in bankruptcy hiding assets.

Case in point:  On June 4, 2009, fallen auto mogul Denny Hecker filed for Chapter 7 bankruptcy, asking for forgiveness of some $767 million in debt, while listing $18.5 million in assets.

“If there’s been a larger personal bankruptcy case [in Minnesota], I’m not aware of it,” said Seaver, a veteran bankruptcy practitioner who has concentrated in trustee work for a dozen years now.

Seaver was immediately appointed as trustee in the high-profile case. He hired his own legal counsel, and met with Hecker and his attorneys the day after the filing.

Seaver then started digging to unearth assets not listed on the petition.

In the weeks and months that followed, Seaver estimated he spent somewhere between 15 and 20 hours examining Hecker under oath, in addition to untold hours analyzing information obtained using the investigative tools authorized under the bankruptcy code. He obtained subpoena authorization for approximately 100 persons or entities, while some information came in from individuals by their own accord, and some was received anonymously.

Seaver pored over tens of thousands of documents including those available in an electronic format, as well as paper documents now stored in some 15 to 20 bankers’ boxes.

As for court proceedings, in the main case alone, excluding the adversary proceedings Seaver initiated, there were over 700 docket entries.

Ultimately in March 2010, they entered a settlement whereby Hecker’s girlfriend would be allowed to keep her $30,000 guard dog, and Hecker wouldn’t contest the entry of an order denying his debt discharge.

This came a month after Hecker and his girlfriend were indicted on bankruptcy fraud charges. The two later pled guilty to those charges, as well as other federal fraud charges Hecker has been in federal custody since October 2010 and will be sentenced this year.

In the meantime, the collection of assets continues. To date, Seaver has recovered more than $4.5 million.

“Most bankruptcy cases are not like this. It’s just honest people who run into tough times and they need a fresh start. The investigation aspect comes into play in a very small minority of cases. But it’s just fascinating work. I really enjoy doing it, and the Hecker case has been the most fascinating of all,” Seaver said.

“If people have the perception that you can ‘game’ the bankruptcy system, it does injustice to the system, and it does injustice to the honest people who need it.”