BEHIND THE NEWS: Chicago Express bidder in several court tangles

I n d i a n a p o l i s real estate executive Edward Okun had a low profile in business circles here before he splashed into the news two months ago as the winning bidder for ATA Holdings Corp.’s Chicago Express Airlines.

Two weeks later, however, he yanked his offer, valued at $3 million to $4 million. The reversal added to the air of mystery surrounding Okun, a 54-year-old Carmel resident.

A closer look at Okun, president and CEO of Investment Properties of America, only adds to the questions.

In recent years, Okun has been in several court battles, both as a plaintiff and a defendant, and he’s preparing a new legal assault-this one aimed at recovering his $100,000 deposit from ATA.

“The bottom line is the estate of ATA misrepresented the transaction substantially,” Okun said. “We found a huge discrepancy-to the tune of millions of dollars.”

While Okun declined to be specific about the alleged misrepresentations, his attorney, Joe Kavan of Omaha, Neb., charged the airline overstated the value of Chicago Express’ spare parts.

Jim Carr, a Baker & Daniels partner representing ATA in its Chapter 11 bankruptcy, declined to comment. But in a bankruptcy court filing, ATA said it plans to fight to keep the money.

Motorsports suit

Meanwhile, Okun is taking his own lumps in a separate lawsuit. On May 6, Dreyer & Reinbold Racing LLC sued Investment Properties and its motorsports affiliate, IPofA Racing, charging Okun failed to make $450,000 in payments under an Indianapolis 500 sponsorship.

The sponsorship covers the Dreyer & Reinbold car driven by rookie Jeff Bucknum, who qualified for the May 29 race in the seventh row and finished 22nd. Okun said it was intended to raise the profile of his company, which buys U.S. shopping malls and industrial properties, improves them, and sells them to affluent investors.

Investment Properties specializes in what are known as 1031 exchanges, which allow investors to defer capital gains taxes by reinvesting proceeds from property sales into other real estate.

According to the suit, Okun made the initial $250,000 payment required under the February agreement, but not the $200,000 payment due March 15 or the $250,000 payment due April 1.

In repeated conversations with team principal Dennis Reinbold, the suit says, Okun acknowledged the obligation and kept promising he’d pay, but didn’t. Reinbold declined to comment.

Okun and Kavan tell a different story. Kavan said it was Dreyer & Reinbold that breached the agreement. He said the locally based team failed to live up to its obligations in multiple ways, though he declined to provide examples until he files a response in court.

Because the team violated the pact, Kavan said, “IPofA Racing terminated the agreement and sent notice of termination to D&R Racing prior to the lawsuit being filed.”

$8 million verdict

Other public records suggest Okun has ample cash to make the payment if he chose. In December 2003, a Florida appeals court upheld a 2002 jury verdict awarding one of his companies, Nuko Enterprises Inc., $8 million.

That tussle stemmed from an agreement Nuko struck five years ago to buy A-1 Trailer Rental Inc., a Floridabased storage-container rental business. The court ruled that Tempe, Ariz.-based Mobile Mini Inc. interfered with that contract when it swooped in and bought A-1 Trailer.

Mobile Mini paid Nuko Enterprises the $7.2 million judgment, along with $800,000 in interest, in early 2004, according to the Tempe company’s filings with the Securities and Exchange Commission.

That legal dispute has spawned another. In November 2004, Boston attorney Stephen Burr sued Okun, charging he’s owed more than $600,000 in legal fees and interest for his work on the A-1 deal.

In the suit filed in federal court in Indianapolis, Burr said Okun was able to prevail in the Mobile Mini suit partly because of his legal work on the A-1 deal. Burr wants the court to put the judgment into a trust, from which he would be paid.

“Nuko’s and Okun’s retention of the [$8 million] judgment in the litigation is unconscionable and contrary to the fundamental principles of justice and equity,” Burr’s attorneys say in the suit.

But Lorraine Jahn, a Florida attorney representing Okun, said it’s dubious for Burr to try to take credit for the Mobile Mini judgment, since he was not the attorney handling that matter.

Jahn said Okun has paid Burr what he was owed. Under their agreement, she said, most of Burr’s legal fees were due only if the A-1 purchase closed, which never happened.

Burr referred questions to an Indianapolis attorney, who declined to discuss the case. Okun said the suit is frivolous.

“Mr. Burr has been paid in full-and then some,” he said.