Friday, December 13, 2002

Erpenbeck liens closer to payoff

By Patrick Crowley
The Cincinnati Enquirer

BURLINGTON - Homeowners caught up in the Erpenbeck Co. scandal are closer to having the liens on their homes removed through an agreement more than 20 lawyers reached Thursday in Boone Circuit Court.

The agreement, also signed by Boone Circuit Judge Jay Bamberger, sets up the basic criteria for paying off the liens on 211 Erpenbeck-built home and condominiums throughout Greater Cincinnati. The money will come from a $16.8 million escrow account established when a class action suit filed by homeowners was settled in September. The lawyers signing Thursday's agreement represent homeowners as well as banks and title companies that did business with the Erpenbeck Co.

"Our goal is to get these liens paid off within 60 days," said Cincinnati lawyer Terrance Goodman, who along with his law partner Stan Chesley and Covington lawyer Brandon Voelker represented the homeowners.

The construction loans were never paid off by the Erpenbeck Co., an Edgewood homebuilder under federal criminal investigation for allegations of bank fraud. Employees of the company are accused of taking checks cut at closings and instead of paying off the construction loans depositing nearly $17 million in company accounts at the former Peoples Bank of Northern Kentucky in Crestview Hills.

Since news of the diverted checks was made public in April Peoples has admitted responsibility for the cashed checks and fired its top two executives - president John Finnan and vice president Marc Menne - for their dealings with Erpenbeck Co. president Bill Erpenbeck. The Peoples' board voted in July to sell the bank to the Boone County-based Bank of Kentucky. More than 99 percent of the bank's shareholders agreed last month to the sale, though it is being contested in court by a small group of shareholders.

Peoples funded the escrow account with proceeds that include money generated through the sale of the bank. Peoples' lawyer Beverly Storm said Thursday the liens will be paid from the escrow account. But Peoples is also negotiating with a group of area banks - including U.S. Bank and Bank One - that are being asked to pay off a portion of the liens.

Ms. Storm said Peoples has agreed to pay 70 percent of the $16.8 million. Banks that made construction loans to the Erpenbeck Co. are being asked to pay the remaining 30 percent, she said.


Gift cards - Perfect fit every time
P&G cuts restructuring time
Retail had a boost in November
Erpenbeck liens closer to payoff
Remodeling businesses get more but smaller jobs
OPEC adjusting quotas and prices
Business notes: Manufacturing
Business digest
Tristate summary
Morning memo
What's the Buzz?