Steven Enright and his wife borrowed money from a bank to buy dairy cows and other improvements for the family dairy farm. The bank loan was secured by assets of the Enrights, and also guaranteed by Steven’s parents, with the parents’ guarantee secured by a mortgage on the dairy farm itself (which was owned by the parents).
Many creditors have had the unfortunate experience of receiving a demand letter or adversary complaint alleging that they received avoidable transfers—commonly known as "preferential payments" or "preferences"—during the 90 days preceding a customer's federal bankruptcy filing. Such claims arise under section 547 of the Bankruptcy Code, and can result in a creditor having to return certain payments made during the 90-day preference period.
IN RE: ORTIZ (December 30, 2011)
VIRNICH v. VORWALD (December 20, 2011)
Yesterday Governor Scott Walker signed into law SB 241 which permits non-judicial foreclosures for mortgages and assessment liens on timeshare estates and licenses. The new law took effect upon being signed by Governor Scott Walker.
In re MicroBlade, LLC (Bankr. W.D. Wis.) Case no. 11-14981
“Can I be personally liable?” Directors, officers, and managers of business entities frequently ask that question of their attorneys. A recent Delaware decision reveals an important area of potentially huge personally liability involving a sudden shutdown caused by insolvency.
“Sometimes, you can make no mistakes, do everything right, and still lose.”
Captain Jean-Luc Picard, Star Trek: The Next Generation (TNG)
Traditionally, when a business begins to flounder and take on enough metaphorical water to sink, the officers and directors can find themselves in a fiduciary relationship with the company's creditors. However, in Wisconsin, an opinion was recently published by an appellate court which determined that no fiduciary duty attaches until such time as the sinking company is both insolvent and not a "going concern". In other words, it is only when this ship has sunk that a fiduciary duty will attach.
REEDSBURG UTILITY COMMISSION v. GREDE FOUNDRIES (July 13, 2011)