Wisconsin Bankruptcy Law

Good news for Wisconsin consumers with a sweet tooth: As a follow up to a previous blog entry, the bankrupt Milwaukee-area candy company Quality Candy looks like it found a buyer and apparently will stay in business. Family owned Quality Candy, which has been in operation for about 100 years, filed for Chapter 11 bankruptcy in January. It was an unusual bankruptcy filing in that the company reported debts of $3.4 million but assets of about 4.4 million. A group of local investors have submitted a $2.2 million offer to buy the company, which needs the go-ahead of the bankruptcy judge. Quality Candy is also seeking court approval to get out of various leases at area malls.  Under the bankruptcy laws in Wisconsin and other states, bankrupt companies for walk away from such leases if the bankruptcy judge approves. In this instance, it would allow the successor company to negotiate better lease terms with the shopping centers.

As we have discussed previously, a business entity can not file for a Chapter 13 bankruptcy in Milwaukee, but Chapter 13 is an option for an individual who is  personally on the hook for business debts. If you operate a business that may be drowning in red ink, it may be time to turn to a Wisconsin bankruptcy lawyer for assistance. A Chapter 13 bankruptcy in Milwaukee may be the best way to cut your losses and move forward.

With the baseball season in full swing, the ordinary perception is that owning a professional sports franchise is like a license to print money. Evidently not so. The Hicks Sports Group (HSG), the owners of the Texas Rangers, defaulted on $525 million in debt last year, and unhappy creditors may force the team into involuntary bankruptcy. The team and the creditors have evidently reached a stalemate in negotiations. Amidst this turmoil, Major League Baseball (MLB) may seize the team (under its "best interests of baseball" rule) to orchestrate the sale of the franchise to a group that includes team president Nolan Ryan, the Hall of Fame pitcher. Creditors, however, are said to be dissatisfied with that prospect because of other, higher offers that are on the table. The team owes money to 40 creditors, with the largest being Monarch Alternative Capital.

According to Sports Business Journal.com:

MLB is motivated in part to have the sale completed because it has been supporting payroll at the team since the default. But baseball may also be moving to act now because of worries the creditors could file an involuntary bankruptcy petition. At that point, baseball would not be able to exert the influence it could now, said Irwin Kishner, chairman of the corporate department at New York law firm Herrick Feinstein.

“In bankruptcy court, the judge wants to maximize the assets on behalf of the creditors,” he said.

As part of the deal, apparently the Ryan group is willing to pay HSG for land near the ballpark on which there are no creditor liens, which makes it the preferred buyer from HSG’s point of view.

All high-finance wheeling-dealing is a far cry from what might be involved in, for example, a Milwaukee small business bankruptcy voluntarily entered into by the business owner. Subject to certain unsecured debt limits, a self-employed individual or someone operating an unincorporated business is eligible for Chapter 13 relief under the bankruptcy laws of Wisconsin. By restructuring the amount owed, a Chapter 13 plan allows some debts to be paid off in monthly installments in a three-to-five year period while discharging others. If you operate a business that’s on the verge of closing its doors because the debt load has become unmanageable, contact a bankruptcy attorney in Milwaukee. And depending upon the circumstances, you may be allowed to continue your business during the course of a Chapter 13 bankruptcy in Milwaukee or elsewhere.

Another indicator of ongoing economic difficulties: A high-tech company that moved to Wisconsin to gain the benefit of tax incentives has filed for a Chapter 7 bankruptcy liquidation.

Biotechnology company VitalMedix Inc., a spin-off from the University of Minnesota, moved its operations to Hudson, Wisconsin, last year to take advantage of the state’s tax incentives for start-up technology firms. However, VitalMedix was unable to raise additional needed venture capital in a weak economy. The company was in the process of developing a drug therapy for use by first responders or military medics that could keep patients temporarily alive even if they suffered catastrophic blood loss such as soldiers wounded in a bomb attack or a motorist involved in a major car accident. VitalMedix was one of seven technology companies that got a lot of fanfare when they moved to Wisconsin in October.

The company reported $51,000 in assets and about $917,000 in debts prior to going Chapter 7 and transferring its technology back to the university. The company apparently needed about $15 million to avoid going under. It has now officially ceased operations. A creditors’ meeting in bankruptcy court is scheduled for March 25th.

Like an individual might do in an individual bankruptcy in Wisconsin, VitalMedix plans to liquidate its remaining assets. Wisconsin residents at all income levels have different reasons for considering a Chapter 7 bankruptcy in Milwaukee or in the surrounding area. If you need debt relief in Wisconsin regardless of the amount in question, consider discussing your specific situation with a Wisconsin bankruptcy attorney.

Have you reached the point of no return when it comes to financial difficulties? Making the decision to file for an individual bankruptcy in Wisconsin is not to be made lightly. It’s difficult for many consumers–especially given widespread unemployment and plummeting home equity– to really come to grips with their financial picture. With that in mind, here is a list (suggested by Los Angeles attorney Christine Walton) of some warning signs that it may be time to seek counsel from a Wisconsin bankruptcy lawyer:

    * You’ve emptied your entire bank account to pay bills and are considering tapping into your IRA for the same reason
    * You’re using plastic to as a short-term fix, but the card balance is getting entirely out of hand
    * Your rent or mortgage is seriously overdue
    * Debt collectors call you more often than your own family
    * You can barely pay more than the minimum payment on your outstanding debts
    * You’re about to lose your car to the repo man

If these challenges sound familiar, declaring a Chapter 7 or Chapter 13 in Milwaukee may perhaps be the next logical shoe to drop. Bankruptcy protection in federal court under the bankruptcy laws of Wisconsin can allow a consumer to clear a lot of debt off the books and start anew. A no-obligation candid assessment of your situation by a debt consolidation lawyer may be the first step towards much-needed debt relief in Wisconsin.

Although the employment rate has apparently dipped a bit under the latest government statistics, the economy has yet to dig itself out the hole. Against that backdrop, bankruptcies appear to show no sign of slowing down. Case in point: Neenah Enterprises, Inc., one of the largest independent foundries in the U.S., filed for bankruptcy protection this week. The Neenah, Wisconsin, based company has been operation since 1872 and is best known for making manhole covers and storm grates. In its Chapter 11 filing with the bankruptcy court, the company reported debts of nearly $450 million and assets totaling about $286 million. The company says it has cut deals with major creditors to reduce its debt load while still paying suppliers and vendors. It also has arranged for an additional $140 million in loans that will allow it to stay in business pending court approval. Company representatives also said that it will emerge from the Chapter 11 reorganization in better financial shape and without the need to lay off any workers, which is good news for its 800 employees in Wisconsin.

These are challenging times for business and households who may be seeking debt relief in Wisconsin. For individual consumers who may be out of work or have other serious financial burdens, a Chapter 7 or Chapter 13 bankruptcy in Milwaukee or in the surrounding area can be a way to look with hope to the future. A qualified, experienced bankruptcy attorney in Milwaukee or in other Wisconsin cities can explain the options that are available under the bankruptcy laws of Wisconsin and develop a solution geared to the individual client, whether that client is an individual or a business.