Dead Russian businessman leaves behind a pile of debt, a battle for assets
The late international businessman Mikhail Katamanin lived on a two-mansion lakefront compound in a tranquil Highland Park neighborhood — a place where deer graze on the front yards of millionaires.
The opulent property now stands at the center of a multinational legal brawl over the assets of a man who whipped up a $20 million hurricane of debt, including nearly $7 million owed to Las Vegas and Atlantic City casinos.
Though he lived extravagantly, Katamanin attracted scant public notice in the United States when he was alive. He lived a tycoon's lifestyle even as his debts expanded, his wealth giving him access to lines of credit available to very few.
Drowning in debt when he died in Switzerland last year, Katamanin never managed to repay his many creditors, leaving his heirs and lenders now scrambling to salvage pieces of his fortune.
In a deepening court battle, a creditor's lawyers say Katamanin's sons have tried to sell or improperly sold valuable pieces of their father's eye-popping fleet of foreign sports cars. Among them: a 2004 Maybach 57 that fetched $110,000, a pricey 1997 Bentley Continental T and a rare 2003 Aston Martin Vanquish sporting a V-12 engine, the lawyers say in court filings.
Someone linked to the Katamanin family also has marketed other vehicles and boats, including a 40-foot yacht, the records say.
Katamanin also had a home in Switzerland and two apartments in Moscow, according to court filings. In the final year of his life, his passport was stamped 54 times in eight countries, records show.
A Russian citizen, he died at age 53 in December in Zurich, according to records. Swiss hospital documents don't list the cause of death, but a lawyer involved in the case said he died of a heart ailment.
Little information is available on Katamanin's career, but a source with knowledge of the court case said he traded on the energy markets.
Katamanin was also known to hit the casinos. He would have been considered a "whale," a wealthy casino customer who can tap rich credit lines, said Bernie Zadrowski of the Clark County, Nev., prosecutor's office.
Skipping out on a casino debt is a crime in Nevada, and Zadrowski was preparing to file charges against Katamanin when the businessman died, he said.
But his casino debts are "small potatoes," as one lawyer put it, next to the high-interest $12 million loan he took from a Caribbean investment company and allegedly didn't repay. The loan, which started at 15 percent interest and later leapt to 17 percent, has accrued more than $5,600 in interest per day since he failed to repay it in January 2009, according to court records and lawyers on the case.
His wealth readily earned him more credit, said Michael Pariente, a Las Vegas lawyer who represented him in the casino debt matter. "He was, what's the word I'm looking for, 'liquid,'" Pariente said.
Katamanin listed executive positions at foreign and domestic companies on the casinos' credit documents, and a Swiss financial company linked to Katamanin is tangled in the court proceedings.
Lawyers for the Swiss company, Asarco A.G., and an attorney for his two adult sons declined to comment. One of the sons, Dean Katamanin, also declined to comment, as did other relatives and acquaintances.
Katamanin's wife, Lena; , his other son, Alan; and several business associates could not be reached for comment.
The father of three, who also left behind a young daughter, listed his address as 985 Sheridan Road, a Spanish-style mansion with an indoor pool and a back patio overlooking a private beach on Lake Michigan, according to an online sales listing.
Next door at 975 Sheridan stands a slightly less grand white stone colonial home with three fireplaces and a room for a maid, according to its sales listing. The houses are now separately listed online for a total of $12 million.
His sons' lawyers wrote in court papers that the family was drawn to the area by "a phenomenal public school system in a town that is home to vibrant Russian and Jewish communities."
Lawyers for Katamanin's sons argue he owned no real estate or homes in the United States. He was not the titled owner of either Sheridan Road house — Asarco and another company each hold the title to one of the houses, according to Lake County records.
But the home at 975 Sheridan was offered as collateral on the $12 million loan to Katamanin, records say, and a creditor's lawyer argues that Katamanin controlled the house through a legal agreement with the company that holds the title.
Katamanin's relatives lived at 975 Sheridan, and Katamanin himself lived at 985 Sheridan, said Anthony Licata, a lawyer for the lender, Plymouth Consultants of the British Virgin Islands.
Plymouth's lawyers contend that Katamanin also controlled the house at 985 Sheridan through a legal agreement with its titled owner, Licata said.
In March 2008, Katamanin and a man representing himself as an agent of Asarco signed the loan agreement under which Plymouth agreed to transfer $12 million into Katamanin's Swiss bank account, the agreement states. The loan papers don't explain why Katamanin needed the money, and Licata said he doesn't know.
The MGM Grand in Las Vegas gave him $2.5 million in April 2009, according to casino records and court filings. Casinos owned by Harrah's extended him $1.2 million in late May 2009, and he took another $95,000 from Wynn Las Vegas in early June 2009, according to casino records. Lawyers for Trump Taj Mahal in Atlantic City have filed court papers saying he owes the casino $3.2 million.
Katamanin filed for bankruptcy in June 2009, declaring assets worth between $1 million and $10 million. The bankruptcy was dismissed when Katamanin didn't file required documents, according to federal court records.
Though he is buried in Skokie, according to court documents, the fight over his assets rages on in Lake County court, where the daunting morass of legal motions and documents continues to thicken.
Katamanin registered numerous sleek German and British luxury cars and at least three boats in Illinois, according to court filings.
Lawyers for the sons have disputed claims about sales of that collection and denied they tried to defraud the creditors. They asked the judge to allow them to liquidate assets to pay expenses such as tuition bills at Northwestern University, but an injunction against selling Katamanin's assets remains in force, Licata said.
Lawyers seeking to recoup debts want Katamanin's wealth distributed through Lake County Probate Court.
But lawyers for his sons say he was a resident of Moscow — where he enrolled his daughter in school before he died — and his estate should be settled under Russian law. They argue that Katamanin's only possessions in Illinois were his cars and boats.
"Who are they kidding?" asked Robert Markoff, a lawyer for several of the casinos.
Representatives of the Swiss company, Asarco, have argued they are not legally bound by the loan contract.
Katamanin's verdant showcase neighborhood is the counterpoint to the chaotic court battle. On a recent evening, a doe and two fawns crept from the woods before they were frightened off by a teenager slinging around a curve on Sheridan in a new Volkswagen coupe.
A few yards away, a man who said he was a cousin of Katamanin's wife emerged from one of the houses. Russell Chura said Lena Katamanin still lives in the house at 985 Sheridan, but was in Russia attending to businesses imperiled by the recent drought and would return later this month.
Days later, a woman speaking tentative English who identified herself as a relative said Lena Katamanin would return in October.
Though Chura was staying in a stunning mansion overlooking Lake Michigan, he said he was "not allowed" to go down to the lake.
"I have to be in the house all day," he said. "Too many expensive stuffs inside."
dhinkel@tribune.com
