Court order puts money manager out of business

James Jundt, a former Vikings co-owner, failed to pay $2.3 million he owed to a hedge fund manager

By Rochelle Olson and Patrick Kennedy, Star Tribune

RETRACTION PUBLISHED 12/20/07 — This story describing a Dec. 14 court ruling incorrectly said that a $2.3 million court judgment was against James Jundt and Marcus Jundt. In fact, the judgment was against Jundt Associates Inc. for failure to pay bonus compensation to Paul W. Bottum, which Jundt Associates denied owing him. James Jundt and Marcus Jundt were officers of Jundt Associates Inc. In May, the court found that neither James nor Marcus Jundt was personally liable for the bonus compensation and dismissed all claims against them. The Star Tribune did not intend to state that either James Jundt or Marcus Jundt failed to pay a personal judgment against them. The Star Tribune apologizes for the error.

December 15, 2007—A Wayzata money manager who once played host to President Bush at his posh lakefront mansion is facing legal troubles in connection with a $2.3 million judgment against him.

James Jundt, a former co-owner of the Minnesota Vikings, now has that home for sale for $53.5 million. Hennepin County District Judge Gary Larson issued an 18-page order Friday placing Jundt Associates Inc. into receivership, turning the company over to a neutral third party, James Bartholomew of Lighthouse Management Group in Stillwater.

The order came after Jundt and his son Marcus failed to satisfy an August ruling by Larson that they owed former hedge fund manager Paul Bottum $2.3 million in unpaid bonuses and interest.

Bill Pentelovitch of Maslon Edelman Boorman & Brand, who represents the Jundts, said he wasn't in court Friday. "I don't really have anything to say. Jundt Associates Inc. is out of business, so there's not much to say about that," he said. Bottum's lawyer, Andrew Parker of Parker Rosen, said he doesn't buy it. In October, the Jundts filed a federal Securities and Exchange Commission report claiming to be managing nearly $120 million. "What I think is, once this judgment was entered, they decided to take all the money and get out of town," Parker said.

The 32,000-square-foot Jundt mansion on Bracketts Point Road in Wayzata sits on 13 acres and includes 1,700 feet of Lake Minnetonka shoreline, as well as indoor and outdoor pools. In August 2006, Jundt, a former co-owner of the Vikings and a major GOP donor, threw a fundraiser at the home for now-U.S. Rep. Michele Bachmann. Bush was the main attraction.

Reached on his cell phone Friday, Marcus Jundt declined to comment. A woman who answered the phone at the Jundt home said the couple are out of town. Jundt did not return a message seeking comment.

Parker moved on behalf of Bottum to place Jundt Associates into receivership after attempts to collect on the judgment failed. A Hennepin County sheriff's deputy on Nov. 30 went to Jundt Associates' Minnetonka offices to attempt to collect the judgment, but instead found two employees packing boxes. He was told that the place was closing.

On Friday, Larson gave Bartholomew unlimited authority in identifying and protecting assets of the company for the benefit of creditors.

When Larson ruled against the Jundts in August, he concluded that the Jundts had reneged on promises to pay Bottum bonuses related to the hedge fund's performance in 2000 and 2003.

"Since the judgment, the conduct taken by the Jundts as owners and officers of Jundt Associates has intentionally created obstacles to carrying out the court judgment," Parker said, "and the judge's decision is a step toward breaking down those obstacles."

Jundt Associates started in 1982 and managed large corporate pension plans and other tax-exempt investments. In 1991 it created its first retail mutual fund, the Jundt Growth Fund. Jundt Associates also created American Eagle funds in 1999 and 2000. On Nov. 10, 2006, the board of directors of the Jundt Family of Funds voted to liquidate the Jundt Mutual Funds effective Nov. 30, 2006. James Jundt once worked for Gene Sit, chief executive of Sit Investment Associates at IDS Financial Services in the 1970s.

"Jim, through the years, has been an outstanding member of the investment community and he and his wife have been generous benefactors of the arts and the University of St. Thomas law school," Sit said. "He's been a great success in the investment industry, and I think he may be consolidating his assets and preparing for the future."

Staff writer Neal St. Anthony contributed to this report.

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