In a recently released report, bankruptcy trust managers outlined the likelihood claimants will get some of their money back from a now-defunct West Fargo real estate developer, as millions of dollars loaned to the company’s leader and his associates remain unpaid, according to the Fargo Forum.
In July 2024, five Epic Cos. subsidiaries, or “sub debt funds” — EC West Fargo, Epic Employees, EOLA Capital, Epic Cos. Midwest and Epic Cos. Midwest 2023 — filed for bankruptcy protection. The bankruptcy case is believed to be one of the largest in North Dakota. The report pointed out there is no actual business called “Epic” or the “Epic Cos.,” which has been used to identify the group of affiliated companies created by owner Todd Berning and other insiders.
As part of the bankruptcy proceedings, Lighthouse Management Group Inc. was appointed as the liquidating trustee, helping to oversee payments of Epic’s debts. Patrick Finn, a partner at the Twin Cities-based Lighthouse Management Group, filed the report.
Lighthouse said claims against 22 project companies and other Epic affiliates that received loans totaling $14.7 million have been settled for $4.2 million. An additional $1.1 million has been collected from judgments totaling $8.1 million against 12 borrowers. The trust is also pursuing a fraudulent transfer claim of about $1.9 million.
The trust continues to pursue claims totaling $3.7 million against seven project companies that include Epic Gateway, East Real Estate Holdings LLC, Epic Gateway LLC, Epic Hospitality/Hi West Acres, Sheyenne 32 North LLC, Sheyenne 32 South LLC and Sheyenne 32 South Residential LLC.
No litigation has been initiated against 13 project companies that received $11.9 million in loans and now fall into a “no repayment” category.
“The Trust’s assessment is that the market value of the property owned by these project companies is less than the amount due to their bank,” the report said.
Many of the companies and investments Epic once managed and controlled are “now either in default with their secured lenders or experiencing significant financial distress, leaving investors unexpectedly exposed to material investment losses, capitalization issues, and potential liability under guaranty agreements,” according to the Lighthouse report.
In the report, Finn writes that his company is frequently asked why a complaint has not been filed against Berning.
“The short answer is that Lighthouse has not found any avoidable transfers of cash from the sub debt funds to Todd Berning,” Finn said. “Lighthouse continues to review bank and corporate records of Project Companies, EPIC Management, and other EPIC affiliates to identify avoidable transfers to Todd Berning, his family members, or other EPIC Insiders that the Trust can pursue due to the judgments that the Sub Debt Funds have obtained.”
The report outlines how the companies that filed for bankruptcy began to rack up debts. Starting around 2019, Berning formed the five sub-debt funds to provide the remaining portion of a project company’s financing.
The sub debt funds were financed through unsecured loans provided by outside investors. The sub debt funds were formed for the purpose of providing sub debt to various real estate projects (each a “project company”) throughout North Dakota and Minnesota. Various other Epic-affiliated entities were formed for the purpose of providing additional services to project companies.
For example, in exchange for a $100,000 investment, a sub debt fund would execute a $100,000 promissory note with interest-only payments for several years and a balloon payment at the end. The sub debt funds pooled these loans together and in turn, provided unsecured loans to the project companies to fund the gap between the project’s cost and the financing provided by banks and members that invested funds directly to the project company.
“The fatal flaw in this financing structure is that essentially all the money invested in the sub debt funds was in turn loaned to the project companies or other EPIC affiliates,” the report said. “Compare this to how a bank operates. A bank is required to keep a certain amount of cash on hand because every banker knows that some of their borrowers will get into trouble and won’t be able to repay their loans. The sub debt funds did not maintain any cash reserves. They operated under the assumption that every loan issued would be repaid in full.”
In January 2023, Epic Management provided a $250,000 loan to Norsk Høstfest Association. In September 2025, the trust sent a demand letter to Norsk Hostfest seeking repayment, but after assessing Norsk Høstfest’s financial condition, the parties settled for a claim of $5,000.
The Norsk Høstfest, an annual event in Minot celebrating Scandinavian culture, announced in January that it would end after more than four decades.
Lighthouse has also found that most project companies with the capacity to fully or partially repay their loans from the sub debt funds have refused to do so.
“These refusals left the Sub Debt Funds with no option but to initiate legal action against 36 project companies and other Epic affiliates to recover what could be recovered from the approximately $24.9 million of loans provided to them,” the report said.
In late December, Lighthouse filed a suit in North Dakota Bankruptcy Court against Kyle Pender, Kent Busek, Michael Montgomery, KKP Properties LLC, Maverick Holdings, Meadowlark Investments and Montgomery & Pender. Lighthouse alleges the defendants are guilty of more than 20 counts of fraudulent wire transfers. The lawsuit alleges those company holders siphoned off payments that should have been used to help pay off Epic’s debts after it filed for bankruptcy.
According to federal court documents, about 294 investors and lenders provided approximately $41.8 million to the defendants, who were supposed to use those funds to finance real estate developments across North Dakota through the project companies. Pender and Busek helped organize, manage and invest in the defendant companies and also raised money from outside investors for individual projects, documents said. They provided services to Epic and received substantial payments for those services, but the lawsuit claims money was transferred from Epic when it should not have been.
Lighthouse claims the defendants took upward of $830,000 that should have been used to help pay Epic’s larger debts, according to court documents. Instead, the defendants allegedly paid themselves through commissions and dividends, including on investments they controlled. These actions left less money for Epic’s creditors, so Lighthouse has filed the suit in hopes of recovering some of that money. In a response filed in bankruptcy court, attorneys for the defendants and project companies claim Epic Cos. was a tightly controlled enterprise that carried out a large-scale investment scheme involving millions of dollars raised from banks and investors.
The North Dakota Securities Department opened an investigation into Epic in June 2025. The Securities Department is responsible for investigating violations of securities law, including investment fraud. A securities investigation often begins with a complaint from investors, according to the department’s website.
Although Lighthouse has requested a summary judgment in its favor from the bankruptcy court, the defendants said the facts remain disputed and the case should be dismissed or be decided by a jury trial, according to court documents.
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Lighthouse Report Details Limited Recovery Prospects in Epic Cos. Bankruptcy
A new report from Lighthouse Management Group Inc. outlines how much money investors may ultimately recover from the collapse of Epic Cos., the West Fargo‑based real estate network whose bankruptcy has become one of the largest in North Dakota — with significant ties to Minnesota.
The liquidating trustee, Lighthouse Management Group, is headquartered in the Twin Cities and has played a central role in unwinding the complex web of Epic‑affiliated entities. Partner Patrick Finn filed the latest update, detailing what has been recovered and what is likely gone for good.
According to the report, claims against 22 Epic project companies that borrowed a combined $14.7 million have been settled for $4.2 million. Another $1.1 million has been collected from judgments totaling $8.1 million. The trust is also pursuing a $1.9 million fraudulent‑transfer claim and continues to chase $3.7 million owed by seven additional project companies.
But the outlook dims from there. Thirteen project companies that received $11.9 million in loans now fall into a “no repayment” category because the value of their properties is lower than what they owe their banks. Many Epic‑managed investments across North Dakota and Minnesota are now in default or severe distress, leaving nearly 300 investors exposed to steep losses.
Finn addressed a recurring question: why Lighthouse has not sued Epic founder Todd Berning. The trustee has not identified any avoidable transfers from the sub‑debt funds to Berning personally, though Lighthouse continues to review financial records for potential claims involving Berning, his family, or other insiders.
The report also describes the “fatal flaw” in Epic’s financing model. Beginning in 2019, Berning created five sub‑debt funds that raised unsecured loans from investors and then loaned nearly all of that money to project companies — leaving no cash reserves if projects faltered.
Lighthouse has filed multiple lawsuits to recover funds, including a December action alleging more than 20 fraudulent wire transfers by several Epic‑connected individuals and entities. Meanwhile, the North Dakota Securities Department continues its investigation into Epic’s investment practices.
The bankruptcy case remains ongoing, with Lighthouse signaling that additional recoveries — while possible — will be limited.
