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post #1 of 1 (permalink) Old 07-06-2004, 05:12 PM Thread Starter
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From the Detroit Free Press:

AFTERMATH OF A SUPPLIER'S COLLAPSE: DCT exec's home seized, up for sale
Money to go toward unpaid medical bills

July 2, 2004

A bankruptcy court has seized - and will sell - the luxurious 13,000-square-foot Bloomfield Hills home of former auto-supplier executive James Bronce Henderson III, whose firm collapsed more than two years ago, bouncing hundreds of employees' final paychecks and leaving creditors owed millions of dollars.

About 400 employees later discovered that nearly $700,000 in medical bills hadn't been paid by their former employer, Sterling Heights-based DCT Inc., despite workers paying $25 to $45 a week into a self-funded health-care plan. Proceeds from the sale of Henderson's former home --which is listed at $4.9 million -- will go in part to those unpaid medical bills.

Some money will be set aside to pay businesses that had done work with DCT until its bankruptcy in February of 2002. About 900 businesses were owed more than $28 million by DCT, according to court records and lawyers on the case.

The real estate listing on Henderson's home -- which includes a movie theater, fitness room and heated indoor swimming pool -- calls it the "ultimate in luxury living." So far the best offer is about $2.8 million, according to the real estate agent selling it.

The home's exterior is made of stone and it sits on more than 4 acres inside a gated community.

The house will be sold on July 12, according to the court order. Right now a private-equity firm is the top bidder. Bids go up in increments of $50,000.
"We will be able to pay some of the medical claims, the legal fees and then there clearly should be money left after the sale for the trade creditors, which is good," said Mark Shapiro, a bankruptcy attorney who has worked on the case for over two years for the bankruptcy trustee, which oversees the liquidation of companies to get money for creditors.

"What we are hoping is to get a few people interested in the house so that we get a bidding going on. The more the better for the creditors."
Shapiro said Henderson, who filed for personal bankruptcy after DCT collapsed, agreed to turn over the home to pay off some of DCT's debts. Henderson was majority owner and CEO of DCT, which his father created in the 1960s.

The trustee fought a long, sometimes contentious battle with Henderson, trying to get access to various real estate and other assets.
Henderson's attorney said DCT's vendors are getting more out of this bankruptcy than usually is the case.

"The good thing is they will get at least some sort of dividend out of this bankruptcy, which they often don't," said lawyer Asher Rabinowitz. "That's important to note."

The sale is being handled by Weir, Manuel, Snyder & Ranke, a Birmingham-based real estate firm that specializes in high-end home sales.
"It's quite a spectacular area. It's not on a lake, but it's in the middle of other houses that are. I think the last house in this area sold for about $6 million," said Barbara Spencer, the home's agent.

Former DCT employees -- many of whom got only 30 minutes' notice that the long-time maker of assembly-plant machinery was shutting down -- said they were pleased to hear Henderson's home was being sold. DCT had sales of more than $200 million and 850 employees in 2000, but it collapsed in early 2002.

Late last year, former DCT employees got about $252,000 of the $500,000 they said they were owed in unpaid wages.

"This whole situation was just a mess so I am happy to hear they are selling his home," said Mike Kuessner, who spent 12 years at DCT, the last few as a computer-aided design supervisor.

Kuessner estimated he had $4,000 in medical bills -- many due to a son who had a broken collarbone -- that he'd assumed his DCT insurance had covered while he worked there. The Harrison Township resident later found out those bills were not paid.

"It took me two years to straighten out my credit with all the checks that bounced from them and then from me. I just refinanced my mortgage to pay off my debt and tapped into my 401(k) to get it all straight," said Kuessner, who now runs his own firm, MK CAD Services.

Former DCT employees, vendors and lawyers have accused Henderson and his company of intentionally delaying payments to vendors, or other unsound business practices, while spending lavishly on perks such as golf club memberships.

A former DCT corporate accountant testified in court the company kept two different sets of financial forecasts it used to paint best-case or worst-case scenarios for DCT, depending on financial needs and who was to see the forecasts.

Henderson now lives in Naples, Fla., working for a turnaround firm called Qorval LLC that specializes in helping troubled companies. Previous court records indicated he and his wife had a $1.95 million condo in Naples.
"I guess you hate to hear someone is losing their home, but if you had a $5-million home then you can't be hurting too much," said Tim Belanger, a DCT mechanical design supervisor for seven years.

"I'd feel bad for him, except I think quite a few companies went under when DCT didn't pay its bills."
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