NEW ULM - The Marktplatz Mall legal battle continued Monday at a motion hearing in Brown County District Court.
Edina attorney Joel A. Hilgendorf, representing New Ulm Retail and Development, LLC (NURD) - owned by a California father and son Cliff and Mike Strand and Ohio businessman Lance Warner, who own the northern two-thirds of the mall - had a pair of requests for Judge Robert Docherty.
"A receiver and court-appointed arbitrator must be appointed immediately," Hilgendorf said. "...It may sound confusing, but this case really is quite simple."
NURD's Brown County District Court lawsuit alleges that since Randy Danielson took over the defaulted first mortgage on NURD's part of the mall, he has failed to give proper accounting of the balance due and misused rents he collects.
Danielson denied the allegations, saying he bought NURD's part of the mortgage in 2011 to prevent a sheriff's sale.
Hilgendorf said mall property insurance and utility bills are not being paid and the building is falling into a state of disrepair, which is why the requests were made.
"The receivership requests were made as a way to protect all parties," Hilgendorf said.
Minneapolis attorney Matthew R. Burton representing Danielson and his business SEK Financial, LLC, - who owns the rest of the mall - said Hilgendorf's requests were "absurd."
"The plaintiffs wanted to buy two-thirds of the mall and they can't service the debt," Burton said. "They're trying to put a (bad guy) black hat on my client using receivership on him as an end run. It's legal nonsense."
Hilgendorf said Danielson has not accounted for mall rent money he has collected. He said NURD seeks $140,000 in mall-related expenses from Danielson.
Burton said a full accounting of rents was provided in court case discovery.
He said there seems to be a revolving door involving different California post office boxes for "people you can never get a hold of," - as to who holds the mall mortgage.
"We request the original clients' feet be held to the fire," Burton said. "There is no evidence of $140,000 in expenses. The mall is operating and there are no other court complaints. The plaintiffs are trying to create matters instead of going to trial."
Danielson said he would continue to pay the mall electrical bills.
"I've continued to pay them up to this point. I haven't gotten a call about paying them yet," Danielson said.
Docherty took the case under advisement and said he would review the case file in detail and submit a court order as early as he could.
(Fritz Busch can be e-mailed at firstname.lastname@example.org).