Post and photo by the Hawthorne Hawkman
I happened to be in downtown Minneapolis today doing a bit of research, and decided to look into our friend Paul Koenig (pronounced Kay-neg) a bit more deeply. Specifically, I wanted to see what I would find out about 621 26th Ave N, which has a demolition order on it and a long list of unpaid contractors.
Several months ago, I documented how some Dream Homes had unpaid mechanics' liens, went through foreclosure, and then were repurchased by Koenig. Presumably the workers were never paid. So when it came to the contractors at 621 26th...
...I wasn't surprised at all to find even more unpaid mechanics' liens.
KB Mechanical filed a lien for unpaid work in the amount of $7,470. Wallboard Inc. filed their own lien against this property for $4,833.25. These were for unpaid work, materials, and/or use of equipment.
Then KB filed a lis pendens (basically an intent to foreclose) on the property for unpaid work at this address as well as several others: 1812 16th Ave S, 2119 4th St N, and 2316 Fremont Ave N. I checked, and all of these were already on the unabridged Pamiko list.
The intent to foreclose was for "rough-in, duct work, two new furnaces per property, gas line and furnace installation, and related work" and totaled $29,880. Also, it's quite possible that this intent to foreclose was the tipping point that caused the rate increases described in this article, which would have then led to the collapse of Koenig's entire empire. Exactly how this might have happened would bore most readers to tears, but 621 26th Ave N could very well be the Pamiko Properties' equivalent of the Piltdown Man.
Then, a few months AFTER THAT, Creative Home Construction filed a $17,102.40 lien for "home demolition and remodel labor."
And now this property has gone through foreclosure, meaning that in all likelihood the people who did this work will never be paid. I should note that in merely scratching the surface of two properties - 2321 Lyndale Ave N and 621 26th Ave N - a total of over $93,000 in unpaid mechanics' liens filed against these and ten other properties has been found. I strongly suspect that a thorough investigation of all such unpaid work would show a systematic refusal to pay contractors. I believe that the total amount of unpaid mechanics' liens against Paul Koenig's properties is well over one million dollars.
How many people had trouble staying in business after being ripped off by Koenig? The ripples of his financial misdeeds continue to be discovered.
Can you explain what happens when a lien holder forcloses and they are only entitled to $4k on a house worth much more? Do they have to assume the mortgage or find their own financing?
ReplyDeleteThere are two ways to do a foreclosure by action and by advertisment. Foreclosure by action is a court case, and if the foreclosure is done that way (as in the case of a mechanic's lien, for instance) a settlement can be worked out by the court, by which the "winner" will pay settlement amounts (typically discounted levels of what the lien holders have coming to them), and in exchange, the "winner gets the property.
ReplyDeleteIn a foreclosure by advertisement (the most common - such as usually used to foreclose a mortgage), after the sheriff's sale, any lien holders are allowed to file a "notice of intent to redeem." After the owner's redemption period expires (assuming the owner does not redeem), the lien holders who have filed notices each in turn get a chance to get ownership of the property by paying off the winner of the sheriff's sale, and anyone who filed a notice of intent to redeem in line ahead of them.
AKL
A piltdown man reference? Ah Jeff, you are a nerd of the highest order... ;)
ReplyDeleteAnon 7:58,
ReplyDeleteThanks! And I might add that based on what appears to be significant financial misdeeds by Koenig and the fact that the Piltdown Man was a hoax, I thought the reference was apropos on multiple levels.