Claims made against estate of deceased Lincoln businessman have surpassed $50 million
LINCOLN — As claims against the estate of deceased Lincoln businessman Aaron Marshbanks grew to more than $50 million, a judge told some parties seeking funds Wednesday to work out their differences outside court.
Marshbanks, who was found dead Nov. 2 in a downtown Lincoln parking garage, has been implicated in one of the biggest cases of bank fraud in state history. Both the FBI and state banking officials are investigating.
Since Marshbanks’ death, financial institutions have filed numerous legal claims against his estate. The claims include allegations that Marshbanks and a business adviser obtained millions of dollars of loans by claiming collateral that didn’t exist.
During a 30-minute court hearing Wednesday, lawyers discussed a request by a business partner of Marshbanks to buy out his interest in a limited liability corporation called MKAM, formed to purchase properties with loans and either rent or “flip” them after they were remodeled.
Work it out with special representative
A lawyer for the partner, Michael Kramer, has maintained that allowing his client to buy out his 50% interest in 21 properties in Omaha and Lincoln would generate more assets for the estate to distribute to the banks, savings and loans and credit unions that were owed money by Marshbanks.
The lawyer, Thomas Anderson, said an emergency existed because one of the banks that loaned money to MKAM, First State Bank Nebraska, had scheduled trustee sales on some of the properties for Feb. 15 and 17.
But other parties seeking funds from the Marshbanks estate objected to the buyout, which prompted a court hearing Wednesday before Lancaster County Judge Holly Parsley.
Parsley told the parties to work out their dispute with the attorney she appointed as the special, personal representative to settle the estate, Edward Hotz.
“There’s a lot going on in this case,” the judge said, adding that she didn’t want to schedule a court hearing every time parties seeking funds had an issue, that is Hotz’s job.
The judge set a hearing for Feb. 9 in the event matters couldn’t be worked out.
New claims filed
Meanwhile, a handful of new claims have been filed against the Marshbanks estate in recent weeks, pushing the claims above $50 million. Among them:
- Liberty First Credit Union of Lincoln is seeking repayment of $6.1 million for 37 secured and unsecured loans granted to Marshbanks in mid-2022. The loans varied between $116,000 and $232,000 each.
- Pinnacle Bank of Gretna is seeking repayment of $1.6 million in connection with loans made to Marshbanks and a group of investors for Echo Hills Apartments LLC, a complex near 150th Street and Chandler Road in Sarpy County.Court records indicate the bank loaned Echo Hills $21.4 million in October 2020, then amended the loan to $31.8 million in June 2022 with Marshbanks’ personal guarantee of $1.588 million.
- Bryan Trost, a 50% partner with Marshbanks in a business formed in 2011 called BTAM Enterprises, is seeking payment of $721,612 for properties purchased. Trost, in his legal claim, stated that Marshbanks had unilaterally transferred three Lincoln rental properties out of BTAM to another one of his businesses in September of 2020. When Trost became aware of the transfer nine months later, Marshbanks assured him that he would transfer the properties back. Then, in July 2020, Marshbanks — again without his partner’s authorization — obtained “cash out” refinancing loans against the three properties for his personal benefit.
- Cattle Bank & Trust of Lincoln is seeking repayment of $65,556 for a loan given to one of Marshbanks’ limited liability companies, 1 Chronicles 29:11 LLC.
- Kory Lemke is seeking payment of $679,563 for remodeling work and for six properties “removed or never placed” in a Marshbanks’ entity called KKAM LLC.
- Sean Stewart of Lincoln is seeking payment of $180,000 for two Lincoln properties in which he was half-owner with Marshbanks. The legal claim alleges that the properties were removed from their 2016 partnership, SSAM LLC, without his permission to another Marshbanks entity, 1 Chronicles 29:11, in 2020.
- Leah Sandall of Lincoln is seeking payment of $33,209 for a half interest in another Marshbanks entity, LSAM LLC.
Toxicology tests awaited
Lancaster County Attorney Pat Condon said Wednesday that the exact cause of Marshbanks’ death has yet to be determined, and ahis office is awaiting toxicology reports.
The Lincoln Journal Star, citing a Lincoln police investigator, has reported that Marshbanks sent a “concerning email” on the day of his death saying he would be found in a downtown Lincoln parking garage in an unlocked, silver Audi Q5.
When police arrived, the newspaper reported, Marshbanks’ car was running with the air conditioner on high and a drape covering the windows.
Suspected vomit was found on the back passenger side of the car, and a gun was discovered under the driver’s seat. Also, a bag was found that contained Marshbanks’ wallet, driver’s license and a suspected suicide note.
The autopsy, according to Lincoln police, showed that he had several substances in his blood and urine, including fentanyl and cocaine.
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