By James McNair
The Cincinnati Enquirer
CRESTVIEW HILLS - It was an architectural showcase in 1993, but A. William ("Bill") Erpenbeck's mansion might soon be marketed as distressed property.
The entrance to Summit Estates, with the ERpenbeck home on the left.|
(Enquirer file photo)
| ZOOM |
If a bankruptcy trustee gets the OK from a judge, the six-bedroom house in Summit Lakes will be sold to the highest bidder, possibly this spring. Mr. Erpenbeck, his wife and three children moved to Fort Myers, Fla., in May, and a law firm now occupies his old office in Edgewood. That leaves his house as the most visible vestige of a home-building empire that stretched across the Tristate.
The Erpenbeck Co., the region's third-biggest home builder in 2000, collapsed in April, leaving homeowners, banks and other creditors scrambling to recover more than $100 million in losses. The U.S. Attorney's office and a federal grand jury are investigating Mr. Erpenbeck - the company's former president - as well as other family members, employees and bankers.
A bankruptcy auction of the Erpenbeck estate would be a big event, assuming U.S. Bankruptcy Judge William Howard authorizes it after a Feb. 11 hearing. Four banks have mortgages on the house totaling $1.72 million, and the government has legal shackles on it, saying the three-story home was bought with proceeds of bank fraud. Tax collectors and other creditors have their teeth in it, too.
"I think the novelty - or notoriety - will get people out who just want to see how he lived," said Terry Rasche, a real estate broker in Woodlawn. "Some people will think they can get it for a bargain."
Not the kind of bargain that most people can afford, though. The Erpenbeck house was valued at $1.3 million last year by the Kenton County tax assessor's office and is likely worth more.
It has a designer kitchen, a movie theater, a spa, a bar, an exercise room, marble fireplaces, built-in entertainment systems, a swimming pool and a back yard adjoining the Summit Hills Country Club. Mr. Erpenbeck paid $600,000 for the former Homearama stop in 1993.
Mr. Rasche said there should be a healthy amount of interest in the house, in spite of the $1.3 million valuation.
"That used to be a lot of money, but now I would think there's a pretty good market for a $1.3 million house," he said.
"They should be able to get that. There could be a bidding war to get that house."
First, the bankruptcy trustee - Crescent Springs lawyer Mike Baker - has to overcome any objections to the auction and win the judge's approval. Mr. Baker is already talking to the banks that have mortgages on the house. All of the loans are in default.
The banks involved:
Fifth Third Bank, whose acquisition of CitFed Mortgage Corp. of America gave it a $592,000 stake in the Erpenbeck house. Because other lenders agreed to give up their place in line, Fifth Third has the first mortgage in the house and would ordinarily be the first lender to be repaid after a sale. The unpaid amount is $568,763, not counting interest accrued since May 31.
Provident Bank, which lent Erpenbeck $500,000 in May 1994 and was owed $508,794 as of last April 25. It has the second mortgage.
First National Bank of Northern Kentucky, which made a $450,000 loan to Erpenbeck in June 1994 and is owed about $410,000 through the third mortgage.
Peoples Bank of Northern Kentucky, which was Erpenbeck's personal bank before it sold its operations to The Bank of Kentucky in November. It lent Erpenbeck $250,000 in January 1995 and is owed about $233,000 through the fourth mortgage.
How optimistic bankers are about recovering their money depends on the priority of their claim. John Kummer, an Edgewood lawyer representing First National Bank of Northern Kentucky, wasn't able to gauge his client's chances of a 100 percent recovery from an auction sale.
"It's hard to say. It depends on who shows up with an interest to purchase," he said. "The nice thing about a bankruptcy trustee doing it is that there'll be more exposure to the sale."
Barb Sondgerath, a saleswoman for Coldwell Banker West Shell in Crestview Hills, said she attended parties that Mr. Erpenbeck used to throw for real estate agents in the house. She likes its chances at auction.
"There's a lid for every jar," she said. "What's the value? It's an interesting market right now. Interest rates are very low, but our upper price points are quieter than they used to be. But somebody'll buy it."
The contents of the home would be sold separately.
P&G's new package deal designed to boost profits
Erpenbeck home might be auctioned
Kmart files plan, relies on 2 investors
Economic impact of Iraq war uncertain
HIGGINS: Personal Finance
Why pay down the mortgage?
What's the Buzz?