For the Love of Kringles

What do you do when a product you love may be discontinued because its manufacturer is facing bankruptcy? You buy the brand of course! At least that’s what Wisconsin resident Margaret Ebeling did. Thanks to her, you can still get an alcoholic beverage that tastes like our official state pastry, the Kringle. 

According to the Milwaukee Journal Sentinel, Ebeling is the former marketing director of the now-bankrupt Death’s Door Distillery. She knew the company was in financial trouble, but when her boss announced they were discontinuing her favorite product, Kringle Cream, she was heartbroken. She decided to buy the brand in order to keep it on the shelves. 

She is now working with a Milwaukee-based co-packer and a distributor to build her business. Milwaukee is a natural home for this Kringle-favored drink since the Milwaukee-Racine corridor is Wisconsin’s Kringle belt. And in case you were wondering, the product is made with 100% Wisconsin cream. 

We wish her success as she takes a product that could have been lost to bankruptcy, and runs with it. 

A Familiar Story

The story of Kringle Cream is not an unfamiliar one to those of us in the bankruptcy world. At Hanson & Payne, we regularly work with companies who are in financial distress, and willing to do almost anything to stave off bankruptcy. We facilitate the sale of assets and provide advice on how particular sales may impact future legal actions. It is important that sales be structured so that there is no question that they should be invalidated if the sellers ultimately file for bankruptcy. 

At Hanson & Payne, we understand that risk and sacrifice that goes into starting and running a successful business. And there is no one out there who can appreciate how hard it is to accept that an endeavor you have poured your heart, soul, and money into is not going to make it. We help businesses hold things together when times get tough and wind things down when it no longer makes sense to go on. We are business-savvy, but also compassionate guides during difficult times.  

Passing The Torch 

We also work with people and businesses who are interested in buying assets from distressed businesses, or out of bankruptcy court. There are lots of rules and regulations that must be followed in these situations, so working with an experienced attorney is key. We can assist with due diligence, financing, contract negotiation, and other matters. 

Our firm also has a great appreciation for the work that business owners and entrepreneurs do. We know that the risks they take are what keep our economy ticking. It is our honor and privilege to serve them when they have legal needs. 

Milwaukee’s Bankruptcy Firm 

Hanson & Payne, LLC is a trusted advisor to businesses in the Milwaukee area. We have a reputation for being business-minded in an industry that is often criticized for not understanding that legal action is a means to an end, not an end in and of itself. If you are looking for legal counsel, we would be honored to take your call. Contact us today to schedule an initial consultation. 

The Government Wants The Angel’s Share & The Devil’s Cut

A few years ago, Jim Beam came out with a new product called “Devil’s Cut.” 

According to their website, “When bourbon ages, a portion of the liquid evaporates through the barrel and up toward the heavens. Believed to be angels claiming their dues, this has been dubbed the “angel’s share.” Jim Beam Devil’s Cut is not that portion. Instead, it’s made from the liquid that gets trapped deep inside the wood of the barrel—the devil’s share. And through our proprietary process, we’ve found a way to extract it.”

It’s clever marketing for the barrel-extracted liquor moonshiners commonly call “swish.” It’s also the perfect analogy for the way the government likes to tax businesses. 

The Angel’s Share and the Devil’s Cut

When you are setting up a business, the government charges you a fee. The government then takes a portion of every cent you make. It is the first creditor, the first customer, the first person you pay. It takes the angel’s share. 

As United States Supreme Court Justice Oliver Wendell Holmes, Jr. remarked, “Taxes are what we pay for civilized society.” The government believes this, and wants you to believe it too. That doesn’t mean you shouldn’t take advantage of every tax break and loophole your business qualifies for. The laws creating those tax-saving measures were written for a reason, so there is no shame in taking the government up on its offer. 

The government also wants the devil’s cut. If your business is in trouble, or on the brink of bankruptcy, the government squeezes what it can out of you. It assesses fines and fees if you want to close up shop, and charges people who want to file for bankruptcy. If you fall behind on your taxes, both the IRS and the Wisconsin Department of Revenue levy fines, charge fees, and tack on burdensome interest rates.

Why Bankruptcy Attorneys Can Help Businesses Struggling with Tax Debts 

As bankruptcy attorneys, we are often called on to assist businesses that are struggling to pay their tax debts. In some cases, these debts alone are what is pushing the business owner to consider filing for bankruptcy or closing up shop. 

While most tax debt cannot be discharged through bankruptcy, there are steps you can take to minimize your tax liabilities. 

The secret to resolving tax issues to your benefit is timing. When you file a late tax return, how far along the IRS is in its collection process, or when you choose to file a final tax return for a failing business, can make the difference between paying the IRS or the state 100% of their claims against you, or 0%.

Our firm can tell you what you need to do to begin addressing your tax liability without triggering an audit, and explain what your personal tax liability will be if the business fails. We will work with you to develop a strategy that will minimize, and possibly eliminate, your obligation to the taxing authorities. Please contact us today to schedule an initial consultation. 

Check the Expiration Date on Those Debts

A friend of ours was recently helping their parents clean out their house so they can downsize. Tucked away in a forgotten drawer was a pile of coupons clipped in the 1970s. Instead of chucking them in the trash, our friend outsourced the task of sorting through all the coupons to his kids to keep them busy. Some were for products that no longer exist. Most had long expired. But a few were manufacturer’s coupons with no expiration date. You could take one of those down to the Piggly Wiggly and use it today. 

In many ways, old debts are a lot like those old coupons. Most businesses and creditors have old debts sitting in their metaphorical junk drawers collecting dust. At one point in time, the creditor hoped to collect those debts, but eventually, it was not worth the time or money spent to seek repayment. Now, some of the debts are owed by companies and people that no longer exist. Other debts have expired. 

What are expired debts?

Expired debts, like expired coupons, are worthless. You can ask a store to honor a coupon past its expiration date, but it will probably say no. The same goes for expired debts. You can try to collect them, but savvy debtors will know they are no longer legally obligated to pay you. 

Debts expire after the statute of limitations for collecting them has run. After the statute of limitations has run, the debt is no longer collectable. Each state sets its own statute of limitations, and different types of debt may be treated differently. Many Wisconsin debts expire after 6 years. 

Wisconsin Law on Debt Collection – Chapter 427 of the Wisconsin Statutes

The bulk of Wisconsin’s laws on debt collection can be found in Chapter 427 of the Wisconsin Statutes. Even merchants who are attempting to directly collect a debt owed to them must follow Wisconsin’s debt collection laws. This is important to note because many merchants collecting a debt owed directly to them mistakenly believe that they are exempt from Wisconsin’s debt collection laws because they are not included within the definition of “debt collector” under the federal Fair Debt Collections Practices Act. 

Be sure you are in compliance with both state and federal laws when you are attempting to collect a debt owed to you. If you violate Wisconsin’s law relating to Debt Collection Practices, there are several remedies available to the consumer.

The final way old debts are similar to the drawer full of old coupons is that processing them is often outsourced. The kids sorted the coupons, and debt collection agencies are often tasked with collecting debts that are overdue. 

Work with an Attorney to Get Your Expired Debts Settled

If you have a pile of old debts collecting dust, and you are interested in collecting them, make sure you are not wasting your resources going after expired debt. Consider outsourcing your collections to a repudiable collections agency, or working with an attorney that has experience serving businesses and creditors like you. If you are looking for representation, please contact our office today to schedule an initial consultation.