The bankruptcy case of Greater Des Moines developer Jon Garnaas, believed to be the largest in the history of the state when it was filed in November 2011, has been whittled from $457 million in claimed debts to $30 million due to unsecured creditors.
Problem is, the bankruptcy estate will have $167,269 to pay those millions after administrative costs are deducted.
Garnaas was the driving force behind the multifaceted Ladco development empire that included the development of single-tenant medical offices, the Clive wellness complex, the Davis Brown Tower in downtown Des Moines and the Village of Ponderosa in West Des Moines.
Ladco Capital Management found equity financing for the projects, and Garnaas formed a construction company.
However, the collapse of financial markets in 2008 in Iowa saw sources of capital disappear. Garnaas also came under some criticism for reaching too far in his development schemes, especially with the upscale residential and commercial district at Village of Ponderosa.
When Garnaas and his wife, Faith, filed to liquidate their assets under the U.S. Bankruptcy Code on Nov. 30, 2011, they claimed $1.1 million in assets and $457 million in debts, with $448 million due to unsecured creditors, including banks, individuals and insurance companies.
However, in a report filed March 14, trustee Charles Smith reduced those numbers to $30 million owed to 46 creditors who filed claims on time, $9 million owed to 18 creditors who did not file claims on time, and $20 million in claims that were filed by eight banks, all holding security interests in various Garnaas properties, most of which have been sold.
The unsecured claims that met filing deadlines have priority and will be paid at a dividend of 0.6 percent, Smith said in his final report. Great Western Bank will receive $68,599 on three claims totaling $12.4 million.
Regions Bank filed claims totaling $8 million, the largest amount asserted by lenders determined to hold security interests in loans. As with other secured lenders, it will not receive a payment from the bankruptcy estate.