DETROIT LAKES, Minn. — A lake home near Detroit Lakes, formerly owned by a St. Thomas, N.D., farmer that amassed $64 million in debt by the time he filed for bankruptcy, was officially sold to a Fargo doctor at the end of July.
According to federal bankruptcy records, the 50-acre lakefront property on Island Lake initially was purchased by Ron G. McMartin Jr. for $1.3 million. It was improved and at one time was on the books of his McM Inc. farming operation for $2.5 million.
The lake home was moved to the Island Lake Irrevocable Trust for McMartin's two grown daughters. Erik Ahlgren, the bankruptcy trustee, sued to return its value for the benefit of creditors in bankruptcy.
Documents show the lake property was purchased by Adam and Angela Jackson, of the Fargo area for $1.3 million. Dr. Adam Jackson is chairman of neurosurgery at Sanford Fargo. The daughters of McMartin will receive 25% of what remains after first paying off a nearly $800,000 mortgage and after other expenses, including taxes and real estate fees. Some dispute remains on the value of some personal property. The final amount available to the creditors is not yet clear.
In a related matter, Ahlgren also has sued McMartin's parents, Ronald G. McMartin Sr., and his wife, Bonita "Bonnie" McMartin. That case remains in dispute and is expected to go to mediation on Aug. 30. Ahlgren asserted McMartin Jr. had power of attorney for his father was operating his father's farm. The father's farm was profitable at the end while the son's was falling toward bankruptcy, Ahlgren said.
McM Inc. and McMartin Jr., filed separate Chapter 7 bankruptcy liquidation cases in 2017. The farm at the end ranged from 40,000 to 50,000 acres of high-value crops, including potatoes, dry edible beans and sugar beets. Creditors filed claims of $64 million, including $43 million to BMO Harris Bank. The bank in late 2017 agreed to a managed settlement of $4.9 million.
Ahlgren said the McM bankruptcy is "getting close to closing." McMartin Jr.'s personal bankruptcy is separate but on the same timeframe.