How A Bankruptcy Brought Baseball Back To Milwaukee

We often reassure perspective clients who are having a hard time dealing with the thought of filing for bankruptcy that it might end up being one of the best decisions they ever make. Filing for bankruptcy forecloses some opportunities, but it can open up a whole host of other options. Those wanting proof of this concept must look no further than Miller Park. The Brewers exist because of a bankruptcy.

Milwaukee got its first major league baseball team in 1953 when the Boston Braves moved to town. The Braves were quite successful thanks to standouts like Hank Aaron, and the team set an attendance record for the league. But after a few years, ticket sales slumped, even though the team was doing well.

The team was eventually sold to a Chicago businessman who wanted to increase ticket sales and move the team to a larger media market. 1965, the Braves owners announced the team would be moving to Atlanta.

A legal battle soon broke out. “[A] criminal complaint was filed in Milwaukee County Circuit Court alleging that the Braves and the other nine teams in the National League had conspired to deprive the city of Milwaukee of Major League Baseball, and, moreover, had agreed that no replacement team would be permitted for the city. As such, the complaint alleged, the defendants were in violation of the Wisconsin Antitrust Act.”

The case went all the way to the Wisconsin Supreme Court, which ruled that the move was not criminal. On appeal, the United States Supreme Court only narrowly decided not to take up the case, leaving the Wisconsin Supreme Court’s ruling intact. The Braves were officially never coming back.

Then, in 1967, Major League Baseball (MLB) announced that it was adding several expansion teams. Kansas City, Montreal, San Diego, and Seattle were all getting a brand new team for their town for the 1969 season. Milwaukee was understandably upset. It, like Kansas City, had lost a team to another city, but it was not picked as the location of a new team. Many believe Milwaukee was snubbed by MLB as retribution for the lawsuit the state filed when the Braves left.

The citizens of Milwaukee were heartbroken, but perhaps none were more upset than the team’s minority owner, local businessman Bud Selig. Yes, that Bud Selig, the future Commissioner of Baseball.

As the four new teams rushed to prepare for the 1969 season, Selig and other Milwaukee business leaders were doing everything they could to convince an existing team to move to Milwaukee or get MLB to add a new team in the city.

Selig got lucky thanks to virtually everything that could possibly go wrong in Seattle happening. After just one season, the Seattle Pilots declared bankruptcy, becoming the first and only professional sports team to ever do so. Selig bought the team and moved them to Milwaukee, where they made their debut as the Brewers for the 1970 season.

The Pilots’ bankruptcy also worked out for fans in Seattle. The state of Washington sued Major League Baseball over the Pilots’ 1970 departure, and the league ended up allowing the Mariners to start up in Seattle in 1977.

As this story illustrates, bankruptcy can be a real catalyst for business development. It is impossible to predict what chain of events will be triggered by a bankruptcy, but often something good comes right along with what is at first considered something bad.

Keeping Litigation From Leading To Bankruptcy

ast month, the popular fireworks display company Bartolotta Fireworks Co. announced that it will close and become part of Wolverine Fireworks Display Company. Bartolotta, which was headquartered in Delafield, put on many of the largest pyrotechnic shows in the Milwaukee area, including the shows at Summerfest, Festa Italiana, Polish Fest, and German Fest. Reports on the company’s bankruptcy proceedings and business dealings suggest that a lawsuit filed against Bartolotta by Wolverine may have been partially to blame for the company’s financial difficulties.

Jeff and Donna Bartolotta, who owned 1/3 of Bartolotta Fireworks Co., filed for Chapter 7 bankruptcy earlier this year. The couple reported about $3.7 million in liabilities and $506,000 in assets. They noted that the Bartolotta Fireworks Co.’s “[p]rincipal secured lender has accelerated the debt and will be starting a collection action soon.” Other court documents reveal that Wolverine won a $154,000 judgement against the Bartolottas and the Bartolotta Fireworks Co. in a Michigan circuit court last year.

Our firm isn’t involved in the Bartolottas bankruptcy, so we don’t know anything about the case other than what has been reported in the news, but we wanted to highlight this case since some litigation obviously preceded the company’s bankruptcy.

There are a lot of bankruptcy filings out there that are sparked by litigation because it is such a costly and disruptive event for a business. One of the things that businesses who are in litigation, and fearing business disruption or financial difficulty should consider doing, is talking with an attorney about negotiating workouts to keep the business afloat.  

A workout is basically a loan modification that adjusts rates or payment schedules or whatever is necessary to keep a business going during a rough patch. Lenders and suppliers are often quite willing to negotiate such a deal because having a deal in place is better than having no deal in place, which might push their own business into trouble.

Owners that suspect litigation will cause financial trouble for their business should talk with an experienced business or bankruptcy attorney. Workouts are something that a traditional business litigator might not be familiar with, so finding a lawyer that knows what they are doing is critical. And it is important to have this talk sooner rather than later because workouts are a tool for preventing bankruptcy, not something that can be negotiated after bankruptcy is filed. Once bankruptcy is filed, any deals that are struck have to be approved by the bankruptcy court.