Illinois Appellate Court Rules Owner of Hoffman Homes, Inc. Wrongfully Diverted Hundreds of Thousands of Dollars In Order To Avoid Payment Of Company's Debts, and Directs Trial Court To Enter Personal Judgment Against Owner

In a decision handed down on February 18, 2004, the Appellate Court of Illinois for the First Judicial District reversed the Circuit Court of Cook County and directed that court to enter a personal judgment against the owner of Hoffman Homes, Inc.. In January of 2001, Gary Leydig obtained a judgment in favor of his client, R&D Thiel, and against Hoffman Homes in an amount in excess of $1.1 Million after Hoffman Homes had defaulted on a note owing to R& D Thiel. R & D Thiel is the Chicago area's largest carpenter contractor and housing component manufacturer. Hoffman Homes is a high profile developer of residential real estate in the Chicago area. Immediately following the entry of the judgment in 2001, Mr. Leydig commenced efforts to collect on that judgment. Those efforts were frustrated, however, by the actions of Hoffman Homes and its president and owner, Norman Hassinger, who set out to hide and divert Hoffman Homes' money and assets. Though he had been served with legal process (called "citations") requiring him to disclose all of Hoffman Homes' assets, and further requiring him not to pay out any of Hoffman Homes' cash or property until allowed to do so by the court, Hassinger went about stripping his company's checking account of more than $93,000 and hiding the existence of Hoffman Homes' ownership of a substantial development in Libertyville, Illinois called Lancaster. As the Appellate Court found in its decision, during the period the Libertyville development had been hidden from R & D Thiel, Hassinger had allowed more than $880,000 in net proceeds from the sales of homes to pass through that development's checking account. Hassinger then allowed more than half a million dollars to be paid to his other companies and to other creditors - - but not to R & D Thiel in satisfaction of its judgment as he was required by law to do. The Appellate Court's decision states: "Hassinger did not produce the Lancaster operating agreement providing for Hoffman Homes' 50% interest in Lancaster until more than a year after he was served with the citation against Hoffman Homes. This prevented R & D [Thiel] from discovering Hoffman Homes' interest in Lancaster. In the interim, Hassinger diverted Hoffman Homes' share of the Lancaster profits to other entities, which do not have an interest in Lancaster, contrary to the restraining provisions of the citations. In doing so, Hassinger subjected himself to the penalties provided under [the law]."

When Mr. Leydig uncovered and first brought these facts before the Cook County trial judge hearing the case in 2001 and 2002, the judge refused to enter any relief against Hassinger, believing the law did not give the court appropriate jurisdiction to do so. The failure of the trial court to act on R & D Thiel's motions prompted the appeal. "This was one of the more frustrating moments in my career," says Leydig. "We knew there were hundreds of thousands of dollars out there to be had, and I knew my client was absolutely entitled to the relief I was seeking. We just could not convince the trial judge to act on the information before him." The decision of the Appellate Court fully vindicates the position that was being pressed by R & D Thiel and Leydig all along. The Appellate Court's decision states: "The trial court's denial of judgment against Hassinger ignores the purpose of [the applicable law], which is to account for and preserve the assets of the judgment debtor. Accordingly", the decision continues, "we reverse the trial court's denial of our R & D [Thiel's] motion for the entry of judgment against Hassinger.""It's a terrific decision by the Appellate Court," says Leydig. "Legitimate businessmen willingly pay their debts. This decision makes clear that when you have the misfortune of dealing with the other kind of businessmen - - the Norman Hassingers of the world - - the courts will be there to support your collection efforts. Hassinger spent the better part of the last three years hiding and gutting the assets of Hoffman Homes, Inc.. With this decision we can now go after Hassinger personally. It gives new meaning to the saying: 'You can run, but you can't hide'." Click here to read the Appellate Court's opinion.