Thursday, May 02, 2002

Erpenbeck Co. faces additional lawsuits

Bank One adds to company woes

By James McNair,
The Cincinnati Enquirer

        The nation's sixth-largest bank, Bank One, has joined the list of those suing home builder Erpenbeck Co. with $9.8 million in foreclosure lawsuits involving Oakwood Lakes in Mason, Sherwood Lakes in Union and Steeplechase in Boone County.

        The Chicago-based bank filed two of the lawsuits Wednesday in Boone County Circuit Court and one in Warren County Common Pleas Court. The suits seek the repossession and resale of undeveloped land and uncompleted and unsold homes.

Bill Erpenbeck
Bill Erpenbeck
        Since the FBI confirmed last week that it is conducting a criminal investigation of the Erpenbeck Co., subcontractors have filed numerous liens against the Edgewood home builder, and banks have sued to collect delinquent loans. The FBI has declined to comment further on its investigation. No charges have been filed.

Default allegations

        In the biggest of the latest lawsuits, Bank One accuses Oakmont Village Builders — the Erpenbeck-owned developer of Oakwood Lakes — of defaulting on $6.9 million in loans from 1997 and 2000. The suit also names Erpenbeck Co. and A. William “Bill” Erpenbeck, the former president of the building firm, because they had guaranteed that the loans would be paid.

        In Boone County, Bank One alleges that Erpenbeck companies defaulted on two loans made just eight months ago.

        The bigger of the Boone County complaints alleges that Mount Zion Real Estate Development is delinquent on $1.8 million from the financing of Sherwood Lakes. Bank One also seeks $1.1 million overdue from Steeplechase Builders for a condominium project in Erpenbeck's Steeplechase subdivision on Richwood Road.

    If you have any information about the investigation of The Erpenbeck Co. or the inner workings or business practices of the company, please contact Enquirer staff writer James McNair at 513-768-8498 or at
        The lawsuits were filed by Robert Rubin and Michael Schmidt of Cohen, Todd, Kite & Stanford in Cincinnati.

        As in other loans made to companies created for specific projects, the Boone

        County promissory notes were signed by Bill Erpenbeck. He was replaced as president of Erpenbeck Co. in March by his brother, Jeff, who could not be reached for comment Wednesday.

        Provident Bank filed suit Monday against Erpenbeck Co. and Bill Erpenbeck for $2.6 million, saying they guaranteed loans to Aston Oak Builders and Erpenbeck & Kennedy for a residential project in Miami Heights.

Hitting home

        Bill Erpenbeck's own home — a Crestview Hills mansion assessed at $1.3 million — is the subject of a foreclosure suit. First National Bank of Northern Kentucky, based in Fort Mitchell, filed the suit last week, alleging that Mr. Erpenbeck owes $398,655 on a $450,000 loan made in 1994.
       No criminal charges have been filed in the Erpenbeck matter, but concerns about bank fraud have drawn the attention of the FBI and the Federal Deposit Insurance Corp. According to people familiar with the investigation, authorities want to know if Erpenbeck Co. checks were diverted from home sales into Bill Erpenbeck's own bank accounts.

"It just sat there'

        Liens and lawsuits have been filed daily against Erpenbeck companies in the past week. People who paid deposits on new homes are also scrambling for refunds or a resumption of construction. Owners in several Erpenbeck developments are calling meetings to discuss their predicament.

        “We've asked to get out of our contract,” said Tom Heath, who paid $5,000 toward a four-bedroom house in Savannah Lakes in Florence in July. “If the house is completed, we're worried about it being a quality product because for a good three or four months stretch of time, it just sat there in the winter, unprotected.”

       Enquirer reporter Chris Mayhew contributed to this report.


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