Bankruptcy Judge Approves $24 Million Judgment against Danny Hendon

by San Antonio Attorney

Diversified Funding Group LLC obtained a $24M judgment against Danny Hendon, the owner of Danny’s Family Car Wash. The judgment in favor of the Scottsdale investment firm was granted Aug. 13 by Bankruptcy Judge Eileen Hollowell.

Daniel L. Hendon, the fledgling developer and car wash titan, filed for personal Chapter 11 reorganization bankruptcy on July 25, 2011, stating more than $317 million in debt and $10.5 million in assets.

DFG is a private real estate lender. It financed Hendon’s development company that included a $7.8 million loan in 2007 for the Main Street Glendale development that failed. Hendon made a personal promissory note for that loan, based on court papers filed by the lender.

In 2010, DFG filed a case against Hendon and his partners for fraud and violation of contract. The firm won a judgment worth $17.7 million. DFG also disputed how the proceeds of the loan were used by the developers, and whether there was overstatement of the worth of his car washing business when it applied for the real estate loan.

Hendon sought for Chapter 11 bankruptcy protection and DFG’s claim is part of that bankruptcy case.

In August 2013, Hendon was charged of rehiring undocumented workers and helping some of them in obtaining fake identification. Last month, Hendon pleaded guilty late in the case.

Some of the Danny’s Car Wash structures also face property foreclosure. DFG attorney Mike Ross said they intend to aggressively pursue in getting the payment from Hendon.

DFG also filed claims against Hendon’s real estate development partner Robert Banovac , who also declared bankruptcy.

A company that deals with financial problems has the option to file for Chapter 11 bankruptcy to help preserve the jobs of employees and the future of the company, while it is restructuring and eliminating debt.

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