No More Shopko Gate At Lambeau

The Green and Gold are back on the gridiron, but you will notice something a bit different about Lambeau Field if you visit it this season. The gate that used to be known as Shopko Gate is now being referred to as “South Gate.” 

Shopko had been the sponsor of the entrance gate added to Lambeau Field as part of the south end zone expansion since 2013. Now, both the retailer and its name above the gate are no more. 

So, What’s Going to Happen Now?

When the Ashwaubenon-based retailer filed for Chapter 11 bankruptcy protection in January, the future of the gate’s name was uncertain. Had the “Official Hometown Store of the Packers” already locked in a multi-year deal? Would its name above the gate outlive the company itself? 

We now know the answer is no, but that does not mean that the Shopko name will be erased from history. 

Shopko purchased the naming rights to Shopko Hall in the Brown County Veterans Memorial Complex for the life of the building in 1999 for $1.4 million. However, in a weird twist of fate, that building is being demolished this year to make room for the new Brown County Expo Center. 

The only enduring Shopko branding is carved into the CityDeck boardwalk that juts out over the Fox River. According to the Press Gazette, “Shopko contributed $250,000 toward CityDeck’s $12 million price tag and the recognition for its support will not be going anywhere. It is literally carved into the wood in Shopko Landing.” 

The Packers will undoubtedly have no trouble finding a new sponsor for “South Gate” and may even get another company to pay it to be called the “Official Hometown Store of the Packers,” but this is an example of the ripple effect bankruptcies have on even healthy businesses they are connected to. The Packers had a 98% drop in profit over the last year, and losing a major sponsor would have played some role in that dramatic decrease even though it is not mentioned as a major factor in the team’s statement about its finances

Contact Our Attorneys Today to Help Navigate Through Bankruptcy

At Hanson & Payne, we help companies going through bankruptcy, and companies who are impacted by a customer or debtor’s bankruptcy, navigate what can be a complex and frustrating process. We are a reliable and experienced team you can trust in the worst of times. Contact us today to schedule an initial consultation. 

What We Learn From the Remington Bankruptcy

Last year, the nation’s oldest gun manufacturer went bankrupt, but it continues to operate as a market leader in the firearms industry. Remington’s resilience provides an excellent case study on the bankruptcy of a business that continues to operate, and the actions its creditors took to save it.

A perfect storm

Remington’s bankruptcy was unexpected, to say the least. Over the past decade, the gun market has been booming. Experts in the industry claimed President Obama was the best gun salesman ever since 2nd Amendment enthusiasts feared he would curtail their rights, and therefore stockpiled guns and ammunition. 

But when President Trump was elected, things changed. People were no longer buying out of fear, so gun sales slowed dramatically. Around this same time, Remington was sued by the relatives of the victims of the Sandy Hook massacre. The shooter favored Remington guns. 

The bad press and drop in sales couldn’t have come at a worse time for Remington, which had a great deal of debt foisted upon it by the private equity company that bought it back in 2007 — they did some sort of financial wizardry that sort of made the company pay for its own acquisition and then some. Remington couldn’t make the hefty payments and was forced to declare bankruptcy. 

Down but not out

Instead of liquidating its assets and closing up shop, the century-old company negotiated a debt-for-equity swap with its creditors. Creditors took ownership stakes in the company in exchange for forgiving more than $775 million of debt. Remington also received $193 million in new financing. 

It is on this new financial footing that the company will move forward. It has a state of the art factory in Alabama and sportsmen across the country who are loyal to the brand. Thanks to the bankruptcy system, it can capitalize on these assets and perhaps stay in business another 100 years. As Anthony Acitelli, Chief Executive Officer of Remington put it, “It is morning in Remington country.”

Not as unique as it may seem

Remington’s story is not uncommon despite the fact that there are not a lot of news articles written about companies that successfully navigate the bankruptcy system or debt-for-equity swaps. Every day the Hanson and Payne team helps Wisconsin businesses who are contemplating bankruptcy, or who have already filed, find a path forward. And we are just as frequently called on by creditors who are looking for guidance when a debtor is in financial trouble.

The sooner a business comes to us for help, the more options are available to it. We have lots of experience helping debtors and creditors avoid bankruptcy altogether by negotiating business workouts or creative financing options. Debt-for-equity swaps are just one option. 

Whether you or one of your clients are facing challenging market conditions or made poor financial decisions, there is a path forward. The Hanson and Payne team can help your business out of even the most difficult situations. Contact us today to schedule an initial consultation. 

Fox Valley Pro Basketball Files for Chapter 11 Bankruptcy

Chapter 11 bankruptcy allows a business to continue operating throughout the bankruptcy process. With this type of bankruptcy filing, the debtor usually proposes a reorganization plan intended to both keep the business alive and pay its creditors over a period of time. Recently, the owner of the Menominee Nation Arena in Oshkosh, Wisconsin, filed for Chapter 11 bankruptcy protection. The owner of the arena, Fox Valley Pro Basketball, Inc. filed for bankruptcy on August 19th in the Eastern District of Wisconsin Bankruptcy Court.

Fox Valley Pro Basketball Files for Chapter 11 Bankruptcy

Menominee Nation Arena is home to NBA G League Wisconsin Herd. This basketball team is affiliated with the Milwaukee Bucks. Fox Valley Pro Basketball, Inc., owner of the arena, was more than a year behind on the mortgage payment for the Menominee Nation Arena. Just before the company was due in Winnebago County Court regarding the mortgage non-payment, it filed for bankruptcy. Bayland Buildings, a general contractor, had filed a Foreclosure of Mortgage complaint against Fox Valley Pro Basketball and claimed that the company owed $13 million on the mortgage. Bayland Buildings stated that no regularly scheduled mortgage payment had been received by Fox Valley Pro Basketball since May of 2018.

In the bankruptcy filing, it is estimated that Fox Valley Pro Basketball has assets totaling between $10 million and $50 million. The filing further states that the company may have close to 200 creditors and estimated liabilities of $10 to $50 million. The bankruptcy court, during a hearing on August 23rd, approved a lending proposal for Fox Valley Pro Basketball while the company makes an effort to successfully reorganize the business. In order to meet cash flow needs during the Chapter 11 bankruptcy proceedings, Windward Wealth Strategies, Inc., owned by a group that has a controlling interest in Fox Valley Pro Basketball, has agreed to lend Fox Valley Pro Basketball up to $200,000. Greg Pierce, President of Fox Valley Pro Basketball has also stated that they are putting money of their own on the line to make the bankruptcy and reorganization process successful. With Chapter 7 bankruptcy, a business is usually looking to bring operations to a close. Chapter 11 bankruptcy allows a business to remain open during the bankruptcy process and attempt to reorganize the company in order to survive bankruptcy and continue operations.  Menominee Nation Arena does plan on continuing operations throughout the reorganization. Jason Fields, General Manager of the arena, has made it clear that the arena remains committed to supporting the greater Oshkosh community.

Wisconsin Bankruptcy Legal Counsel

The type of bankruptcy you file is very important. The knowledgeable bankruptcy attorneys at Hanson & Payne, LLC can counsel you on your options and provide trusted legal counsel throughout the bankruptcy process. We are here to provide continued support to our clients and always watch out for their best interests. Contact us today.

What Happens To My Business Credit Card When I File For Bankruptcy?

Maybe you are a small business owner here in Milwaukee with a business credit card from your local bank. Or maybe your employer has you charge certain expenses to a company credit card. But if you have a business credit card, you are probably wondering what will happen to it if you file for bankruptcy. The answer is every lawyer’s favorite answer — it depends. 

Small Business Owner With A Business Credit Card 

If you are a small business owner, and you have a credit card for your business, it may or may not get pulled into your bankruptcy estate if you file for personal bankruptcy. It depends on how your business is structured and how your business is doing. 

There are so many factors at play in this scenario that you really need to consult with an experienced bankruptcy attorney to figure out what will happen in your specific situation. 

The Corporate Credit Card 

If your employer wants you to use a credit card to pay for work-related expenses, what happens to that card if you file for bankruptcy depends once again on your specific situation. 

There are two basic types of corporate credit card accounts — authorized user accounts and obligor accounts. 

An authorized user account is an account that is in your employer’s name. You are authorized to make business-related purchases with it, but the employer is the one paying the bill. If you file bankruptcy, you probably won’t have to list the account in the paperwork you file with the court since it’s not in your name. You should be able to continue using this card during your bankruptcy for work-related expenses and after your case is over since the card is owned and paid for by your employer. 

If you have a credit card that you use for work-related expenses on your company’s behalf, but the card is in your name and you are personally responsible for paying the bill (and then submitting paperwork to get reimbursed by your company), the account is an obligor account. 

This card will likely need to be disclosed to the court when you file your bankruptcy case. If there is a balance on the card, it will need to be reported as a debt you owe even if all of the debt will eventually be reimbursed by your company. 

The bank that backs this credit card will probably shut it down, so your company will need to either give you a new card where you are just an authorized user or work out some other arrangement. 

Your bankruptcy attorney can help you figure out what kind of card you have and what actions need to be taken to move your bankruptcy forward. 

Do you need to tell your employer you are filing for bankruptcy if you have a company credit card? 

It’s really none of your employer’s business if you file for personal bankruptcy, but if you have a company credit card it becomes of interest to them. In most cases, it is better for you to tell your employer what is going on than for them to find out from the court or from the credit card company. 

Looking for advice? 

Working with an experienced bankruptcy attorney will smooth the bankruptcy process and ensure that your business credit cards are treated appropriately. If you are looking for advice on this topic, please contact our office in Milwaukee to schedule an appointment.

Can We Keep the Cabin?

Owning a cabin “Up North” is a Wisconsin tradition going back generations. Whether it is a two-room shack with no running water or a newly built mansion with its own boathouse, Wisconsinites love their weekend get-aways. When we talk to a client that is considering filing for bankruptcy, we often get questions about what will happen to the family’s vacation home. 

The answer is every lawyer’s favorite answer — it depends. It depends on who actually owns the property, whether the property is owned outright or has a mortgage or liens attached to it, and what chapter of the bankruptcy code the debtor is filing under. 

Who owns the property? 

Many Wisconsin vacation homes are owned by more than one person. Sometimes brothers and sisters share ownership of a home that was purchased by mom and dad years ago. Sometimes the home is owned by a trust but primarily used by the person filing for bankruptcy. This complicated things, but it is so common there is a lot of case law we can rely on when we argue that a particular property should be saved. 

In general, it is easier for a debtor to hold on to a cabin that is owned by several family members or a trust than one that is owned by the debtor alone. 

How much equity is there in the cabin? 

This may seem counterintuitive, but if a vacation home is debt-free it may be more difficult to keep out of the bankruptcy estate. If the debtor has a lot of equity in his or her vacation home, and selling it would help pay off the creditors, the bankruptcy trustee may decide it would be best to sell it. 

If there is not going to be a lot of meat on the bone after the sale is made, commissions are paid, and liens are paid off, the trustee may decide it is not worth the effort to sell the property. 

What chapter of the code is the filing under? 

People who file for bankruptcy under Chapter 7 of the bankruptcy code should be prepared to see their second home sold off. Chapter 7 is a liquidation bankruptcy, and the property is just another asset, no matter how much sentimental value it holds. 

Filing under Chapter 13 of the bankruptcy code may allow a debtor to hold on to a second home if the debtor will be able to pay off their creditors through the Chapter 13 repayment plan process.

You Are Not Alone

Keep in mind that all this is just general information, if you want advice about what to do in your specific situation, you need to contact our office in Milwaukee to make an appointment. There are around 188,000 seasonal or recreational homes in Wisconsin, and you will not be the first owner our office has advised who would do anything to hold on to their little slice of heaven Up North.

Debt Restructuring Fails To Save Sand Mine From Bankruptcy

Earlier this year, one of the biggest sand mining companies in the state of Wisconsin entered into a debt restructuring agreement with its lenders in a last-ditch effort to stave off bankruptcy. Unfortunately, the move didn’t work, and the company has now declared bankruptcy, but it is an interesting example of what tactics can be tested before a company resorts to bankruptcy

Sand mining is a thing? 

If you were unaware that sand is big business, you may want to check out this story from 99% Invisible that explains why “[s]and is actually the most important solid substance on Earth… It’s the literal foundation of modern civilization.”

And it turns out that the sand found in our state, which is known as “Northern White” to those in the sand industry, is exceptionally good sand — hard and round. So good, in fact, it was being shipped clear to Texas for use in the frac mining industry. 

The frac mining boom set off a corresponding sand mining boom in Wisconsin. From 2011 to 2014 they couldn’t dig the stuff out of the ground fast enough. However, shipping sand across the country is expensive. So, frac miners in Texas started looking for sand closer to home. What they found wasn’t as good, but it was good enough that the demand for Wisconsin sand dropped. At around the same time, the price of oil fell and the demand for frac sand dropped overall as oil producers slowed production. And that’s where we are today — Wisconsin still has great sand, but it is not worth what it once was.

Staving Off Bankruptcy 

Earlier this year, Emerge Energy Services LP, which owns Superior Silica Sands, entered into a debt restructuring agreement with its lenders. The deal would clear Emerge Energy’s debt obligations while making its lenders the new majority shareholders of the company.

Debt restructuring is a common tactic in the business world and one we have helped both creditors and debtors navigate. When it is successful, it can keep a company out of bankruptcy while preserving assets and maintaining production. Keeping the company up and running can also prevent one shutdown from turning into a chain reaction that pushes a whole industry or supply chain into bankruptcy. 

Unfortunately for Emerge Energy, the debt restructuring negotiations failed and the company filed for Chapter 11 bankruptcy. The Daily Reporter pulled the company’s court filings and found that it “owes creditors across the country some $338 million. A list of the company’s 30 largest creditors in court documents includes seven companies that have their headquarters in Wisconsin. Emerge says it owes these firms more than $13 million in total.” 

Hopefully, Emerge Energy’s bankruptcy will not push its creditors into insolvency as well. It may, however, be just the first of many sand companies in our state that files for bankruptcy protection. There are 128 frac sand facilities operating in the state, all producing more sand than the market can bear. 

Bankruptcy Leads to Perkins Restaurant Closures

For the second time in eight years, Perkins & Marie Callender’s Holding LLC, the company which operates Perkins restaurants, filed for bankruptcy. The last time the company filed was back in 2011. Back then the company filed as a holding of the investment group led by Wayzata Investment Partners, which still controls close to 73 percent of the company. Following this bankruptcy filing, there have been Perkins restaurant closures across Wisconsin and other states. Currently, two Perkins locations in Madison remain open as well as those located in Wisconsin Dells and Onalaska.

Perkins Restaurant Closures Amidst Company Filing for Bankruptcy

A Memphis, Tennessee based company, Perkins & Marie Callender’s LLC, filed for Chapter 11 bankruptcy. The filings reveal that the company owes around $100 million to lenders and liabilities totaling $100 million to $500 million. The company’s assets are only valued at $50 to $100 million. The bankruptcy filing indicated that poor financial performance was the result in a decline in sales within both the family dining and casual dining industries. The company has secured $7.75 million in bankruptcy loans, according to court records. The loans are what is referred to as debtor-in-possession financing and are secured in order to continue operating.

The company is in the midst of restructuring and has closed over 19 Marie Callender’s and 10 Perkins. Over 1,000 employees have been affected by this. The company hopes to minimize any further disruptions and loss of employment by making a smooth process of selling off parts of the company and helping ease the transition. Perkins, founded back in 1958, has 342 restaurants in the U.S. and Canada.

Perkins & Marie Callender’s LLC filed for bankruptcy in the U.S. Bankruptcy Court located in Wilmington, DE. While any final sale or other finances would need to be approved by the bankruptcy judge, the company is planning to sell the Perkins portion of the business as well as part of its Foxtail bakery business to Perkins Group LLC. This, referred to as a “stalking horse” bid, lays the foundation for the court-supervised auction of the company’s assets that is likely to take place in September. There are also negotiations underway to sell off parts of Marie Callender, the smaller of the two restaurant brands within the company. There are currently 51 Marie Callender stores operating in the U.S.

Experienced Bankruptcy Attorneys

Bankruptcy involves complex negotiations and company restructuring. There is a lot at stake during all of this. People’s jobs, their livelihoods, and their financial futures hang in the balance along with the future of the company. At Hanson & Payne, our experienced bankruptcy attorneys know how to handle these delicate and complicated matters to protect the best interests of our clients. We are here to discuss your options and to represent you throughout the bankruptcy proceedings. Contact us today.

Will Bankruptcy Allow PG&E to Shirk Responsibility for the Camp Fire?

Last fall, the “Camp Fire” burned over 150,000 acres of land and killed 85 people in Northern California. Although investigators have determined how the fire was started, it is unclear whether the responsible party will be brought to justice. The reason why? They have declared bankruptcy. 

The Fire

Like most other Wisconsinites, who are not accustomed to seeing such horrors in our part of the country, the attorneys in our office were shocked by the news reports and viral video clips from the Camp Fire. Walls of flame devoured everything in their path — including many people who were trapped in their cars. It is still sickening to think of. 

Investigators determined the fire was caused by electrical transmission lines owned and operated by Pacific Gas and Electricity (PG&E). On the hook for billions of dollars in damage, the utility company filed for Chapter 11 bankruptcy protection

The Bankruptcy 

When PG&E filed for bankruptcy, it became the largest utility to ever do so. The company is reportedly over $50 billion in debt, not counting the amount it will owe to victims of the Camp Fire under California’s strict fire liability laws. 

When a company is facing this sort of massive, unknown liability, bankruptcy is often the best option — for everyone involved. Why? Our bankruptcy laws require that every creditor be paid if at all possible, while at the same time allowing the business to move forward. 

Perhaps fire victims will not be paid back for 100% of their losses, but allowing PG&E to restructure and continue operating rather than shutting down will ensure they get something.

It is likely that the bankruptcy court will estimate the fire damages, direct PG&E to come up with some percentage of that amount, then require victims to make claims on that fund while barring future lawsuits. 

Not Shirking Their Duty

Companies who file for bankruptcy in the face of lawsuits are not shirking their responsibility to the public. They are taking advantage of the law to create some certainty in an uncertain situation. Filing for bankruptcy hits pause on all other litigation involving the company and pulls some lawsuits into the bankruptcy process. 

Knowing a defendant is bankrupt, or will be if a major verdict comes down against them, incentivizes the potential plaintiffs to negotiate a solution that will allow all plaintiffs — instead of just the first to file — to get some sort of compensation. There’s probably not enough money to compensate everyone fully, especially if the company has lots of other debt, but the bankruptcy process ensures victims are treated fairly and equally. 

It will be interesting to see how the PG&E case moves forward since the amounts at stake are so large. It may also set the precedent for future cases across the country where a man-made natural disaster wreaks havoc. We will be keeping a close eye on it. 

If your business is facing legal debts that may drive it into bankruptcy, Hanson & Payne LLC is ready to advise you and guide you through the process. Contact us today to schedule an initial consultation.

Choosing State or Federal Bankruptcy Exemptions

Wisconsin Bankruptcy

When you file for bankruptcy, you can protect certain property from sale to satisfy your creditors. You do this by classifying the property as “exempt,” meaning it is exempt from the reach of creditors. If you are filing for bankruptcy in Wisconsin, you have the ability to choose whether you want to claim state or federal bankruptcy exemptions. Wisconsin is one of the few states that allows for this and it can be a huge advantage should you weigh out your options and choose wisely.

Choosing State or Federal Bankruptcy Exemptions

With Chapter 13 bankruptcy, you get to retain both exempt and nonexempt property. You will be responsible for paying back property value to your creditors through an established payment plan executed over several years. With Chapter 7 bankruptcy, however, the bankruptcy trustee has the authority to sell the property to satisfy creditors. Property that is eligible to be sold to benefit creditors is called “nonexempt.” “Exempt” property will be protected from sale.

Additionally, if you file Chapter 13 bankruptcy, exemptions can be used in order to reduce the amount of money that you will be required to pay to satisfy your unsecured creditors. If you are concerned about losing specific property in bankruptcy proceedings, there are several strategies you may employ to protect it. One such strategy is through the use of exemptions. In Wisconsin, you not only can choose some property as exempt, but you can choose between the Wisconsin exemption scheme and the federal exemption scheme. The schemes differ in several key respects. Choosing the one that best protects your assets is important. You must choose one scheme or the other. You cannot pick and choose from both the Wisconsin and federal exemption schemes.

Some of the more notable exemptions for those choosing the Wisconsin state scheme include:

  • $75,000 homestead exemption
  • $4,000 motor vehicle exemption
  • $12,000 consumer goods exemption
  • $5,000 savings and checking accounts exemption

These amounts double if you are married and are jointly filing for bankruptcy with your spouse. This is also true for the amounts of notable exemptions in the federal state, which include:

  • $22,975 homestead exemption
  • $3,675 motor vehicle exemption
  • $12,250 household goods exemption
  • $1,225 exemption applicable to anything you own (referred to as the “wild card” exemption

Also, under both schemes, most retirement accounts are fully protected.

Wisconsin Bankruptcy Attorneys Protecting Your Best Interests

You can get through bankruptcy without losing everything. The fact that Wisconsin allows you to choose between federal and state exemptions is a big advantage and it is a significant decision to make, one of many that will present itself in the bankruptcy process. Hanson & Payne, LLC will help you evaluate your options and make sure you are choosing the scheme that maximizes property protection benefits in your individual case. Let our knowledgeable bankruptcy attorneys protect your best interests as you move forward through the bankruptcy process. Contact us today.

Creditors Beware: Attempting To Collect After A Discharge Could Get You In Big Trouble

Although bankruptcy law is federal law, very few bankruptcy cases make it up to the Supreme Court. So, it is notable that the Justices delivered a unanimous decision in a bankruptcy case near the end of the court term that ended in June. In Taggart v. Lorenzen, the High Court made it clear that creditors who attempt to collect a debt after one has been granted a discharge will find themselves in big trouble. 

Taggert v. Lorenzen

Taggart v. Lorenzen is a complex case, as most cases that make their way up to the highest court are. If you are curious about the underlying facts, you can check out this summary from Oyez, or this one from SCOTUSblog. It is the court’s holding that we are going to talk about. 

In an opinion authored by Justice Breyer, the Court held that creditors who try to collect a debt after a discharge can be sanctioned for contempt of court not only if they knew what they were doing was wrong, but also if there was “no objectively reasonable basis” of their understanding of the discharge order or the statutes that govern its scope. 

This ruling has important implications because there are many circumstances where debts survive a bankruptcy discharge and can still be collected. When a debt survives, the creditor may try to collect it, and that is okay. But if a debt has been discharged, the creditor must write it off, and should not, under any circumstances, try to collect. The problem is there are a lot of debts in the gray area that may or may not be discharged, depending on the circumstances. 

A creditor who is owed a debt that may still exist needs to be extra careful and ensure the debt was not discharged before it makes any attempt to collect. Otherwise, the creditor may be found in civil contempt, which means they can be fined by the court. 

Creditors who want to collect debts owed by a person or entity that has filed for bankruptcy would be wise to consult with an experienced bankruptcy attorney. The accuracy of the advice you take could make the difference between collecting a debt and getting charged a hefty and embarrassing fine. 

Contact Our Milwaukee Bankruptcy Lawyer

Our firm has years of experience helping both creditors and debtors navigate the bankruptcy system, so we are in a good position to advise our clients even in tricky gray-area situations.