The security gate on the house at 226 Seventh Ave. has been jammed open for months.
Weeds are growing in the driveway. Phone books are piling up in the yard.
The abandoned property along one of downtown Kirkland’s main streets looks like it might be part of another sad story of the collapse of the national economy, and, in a way, it is, but there also is far more involved.
In fact, the house is visual evidence of what’s officially described as one of the most complex financial battles ever to take place in Western Washington.
The ongoing legal fighting has generated thousands of pages of court filings and accusations and involves some of the biggest names in the financial arena, including Key Bank and Umpqua Bank.
It also involves some of the best-known names in Seattle and Eastside history, largely centering on the Bingham family, heirs to the Fisher family of businesses, which have included such operations as the Fisher Flouring Mills on Seattle’s Harbor Island and the Fisher broadcasting operations, including KOMO-TV and radio.
On the Eastside, the Binghams and related family members have been prominent in social and business activities, including owning homes in such locations as Bellevue’s Shoreline Drive and well-publicized and prominent auto businesses in the Overlake area of Bellevue.
The immediate Kirkland connection involved one of those auto businesses, Carnutz, a custom auto-and-parts operation that was housed until it closed in December behind another of the Bingham businesses, Park Place Ltd., at 13710 N.E. 20th St., Bellevue.
The house on Seventh Ave. belonged to Scott F. Bingham, who owned Carnutz.Exactly what happened to the house, and Carnutz, and the finances of the banks and the Bingham family is essentially what is being determined in the lawsuits.
At the least, the monies involved are immense. In one federal-court filing, the Binghams contend they’re owed at least $231 million.
The banks, in turn, argue that they’re due millions from loans that were never repaid; Umpqua alone says it’s owed $23 million.
Many of the disputes revolve around a corporation called Bingo Investments, L.L.C., operated by the Bingham family. It’s Bingo Investments that comprises one of the main defendants in a federal civil lawsuit brought by Key Bank in 2009 to try to recover money it says it’s due, although other defendants include Scott Bingham, other members of the Bingham family, a related corporation called Bingo Properties, L.L.C., and Carnutz.
It’s that lawsuit that’s become one of the most contentious legal forums, with Key Bank looking for the repayment of money it says it loaned to Bingo and family members.
The Binghams have responded that they lost hundreds of millions of dollars through misconduct by Key Bank.
Most of the money, according to court records, went into failed real-estate investments in communities ranging from Auburn to Snohomish County, and often involving still other recognizable names, such as Michael R. Mastro, whose own bankruptcy filing in Federal Bankruptcy Court in Seattle is believed to be the biggest and most complex ever brought in the Western District of Washington, involving some $587 million in debts.
The Binghams have argued their problems resulted from the collapse of the national real-estate market since 2008.
Other parts of the Bingo legal maneuvers have been a little more prosaic; however, part of the original Key Bank accusations involved getting an order to seize a 69-foot yacht named the “Bingo” that was moored on Southeast Shoreline Drive in Bellevue and which had been financed with a $1.5 million loan made in 2002.
“The sequence of fiduciary breaches by Key Bank…are a classic, but impermissible, cover-up by Key Bank of its grossly imprudent gambling with the defendant’s assets and its failure to discharge its fiduciary responsibilities,” an attorney for the Binghams argued in 2010.
Key Bank, in turn, blames the Binghams.
“The defendants lost hundreds of millions of dollars they borrowed from various lenders, including more than $10 million from plaintiff Key Bank,” a bank attorney argued in a June filing this year, adding that now the Binghams refuse to accept responsibility for their actions.
Everyone agrees the disputes are huge. Key Bank described the cases as “significantly complex.” Even a trial date is something of conjecture; a March 2011 proposed case schedule estimated the trial will last 15 days and speculated a trial might begin in about 20 months.
Neither Scott Bingham nor any of the Bingham attorneys involved in the cases responded to requests for comment.
Scott Bingham at one time was reported living in a house on 250th Lane Northeast in Sammamish, but that house, which had an assessed value of $3.8 million in 2008, now is scheduled to go to auction Nov. 18, with court filings indicating $32,872 is due in payments on a $353,179 loan.
As for the house on Seventh Avenue, that had sold for $814,950 in 2000 and then was listed for sale for $1.15 million in February, 2010, according to real-estate records. In March 2011, the listing was removed and the house has not been re-offered for sale.
In June 2009, Umpqua Bank obtained a court order directing that the property be seized through a sheriff’s levy as part of the legal fighting over the $23 million it says it’s owed, and that order never has been removed.
The house itself sits vacant and abandoned, with childrens’ toys visible in the windows; neighbors recall that the former owners were trying to raise money by having a garage sale before moving out and left some of the garage-sale merchandise in the basement.
“They got into some hard lending at the end. It was pretty risky stuff,” said a neighbor who lives near the Seventh Avenue property but who asked not to be identified. “We all knew there was a lot of money. There were always fancy cars and stuff over there.”
