In the event that a business becomes unable to pay off its outstanding debts, it may seek bankruptcy protection under either Chapter 7 or Chapter 11. Under Chapter 7, the business stops operating and a designated trustee sells off the business assets. The proceeds of these sales are distributed to creditors and anything left over goes back to the owners of the company.
Under Chapter 11, a business is allowed to continue to operate and reorganize. Usually, the debtor will maintain control of its business through the process with oversight provided by the bankruptcy court. The result of Chapter 11 will either be the successful reorganization of the business, conversion to Chapter 7 bankruptcy proceedings, or dismissal. After years of going through Chapter 11 bankruptcy, the University of Wisconsin Oshkosh Foundation successfully reorganize and is continuing operations after bankruptcy proceedings have ended.
After Years of Bankruptcy, University of Wisconsin Oshkosh Foundation Comes Out Still Intact
The University of Wisconsin Oshkosh Foundation went through three years of Chapter 11 bankruptcy proceedings. The bankruptcy reorganization plan for the Foundation was successful and it now has almost $20 million in assets and the ability to fund hundreds of student scholarships to be valued in the thousands. Additionally, the Chair of the Foundation, Tim Mulloy reports that the foundation has received $3 million in the past few months alone.
The Foundation stumbled into some financial issues when it struggled with several real estate investments that were not proving fruitful. The Foundation required financial support from the university. However, it was suspected that this ran afoul of Article VIII, Section 3 of the Wisconsin Constitution which prohibits the use of public money for private purposes. It was later revealed that the acts of the University to support the Foundation were not, in fact, unconstitutional. The potentially illicit transactions and the media coverage reporting them as such, however, did nothing but hurt the financial situation of the Foundation and they were forced into Chapter 11 bankruptcy.
Now that the Oshkosh Foundation has successfully come out from Chapter 11 bankruptcy proceedings, it is planning for the future. During the who ordeal, the University of Wisconsin-Oshkosh announced the creation of another foundation called the Titan Alumni Foundation. This foundation also solicits donations to fund scholarships. Now there are plans in the works for the two foundations to merge.
Wisconsin Bankruptcy Attorneys
Bankruptcy is not necessarily the end for your business. Like the Oshkosh Foundation, your business can successfully survive and thrive after bankruptcy. The dedicated bankruptcy attorneys at Hanson & Payne, LLC are here to provide clients with unparalleled support. We protect and guide you and your business through bankruptcy to meet your goals. If one of your goals is to see your business thrive after bankruptcy, we are here to help make that happen. For all of your bankruptcy needs, contact us today.