Jefferson Davis is a longtime resident of Menomonee Falls. He is the proud parent of two wonderful boys. He enjoys singing, volunteering, reading, gardening, politics, antiques, history, guitar, violin, piano, officiating, helping neighbors and yard work. He served as Village President of Menomonee Falls from 2003-05. He is a member of Northbrook Church and serves on the Advisory Council for the Salvation Army Rehabilitation Center. He is an independent registered representative practicing in the areas of insurance, investments and retirement.
Judge Orders Receivership for $18,000,000 Taxpayer Funded Menomonee Falls Radisson Hotel While Delinquent on Loan Payments
Village Outmaneuvers Dane County Creditors on Radisson Hotel Receivership
Kudos to Tom Daykin, Journal Sentinel, for getting the scoop on the latest development involving the ongoing saga of the financially challenged Menomonee Falls Radisson Hotel (http://www.jsonline.com/blogs/business/134330643.html).
In an emergency filing that is very shrewd and yet a wise strategic move by the Village, Waukesha County Judge Donald Hassin appointed a receiver to represent the Village on 11-21-11 for the Menomonee Falls Radisson Hotel that has been hampered by multiple lawsuits littered throughout the State of Wisconsin over the last 2 years involving millions of dollars in foreclosure(s), sheriff sale(s), eviction(s), civil fraud lawsuit(s), judgments and construction liens.
The Village lists the address for the Menomonee Falls Radisson Hotel Business Partners as 2418 Crossroads Drive, Suite 3800, Madison.
The Village has been working with this group for over 3 years.
The Menomonee Falls Radisson Hotel Business Partners were evicted from their Madison Office this year and are the subject of a court ordered judgment of nearly $45,000 for unpaid rent in Dane County at the office building with T. Wall Properties.
The Menomonee Falls hotel owners currently operate out of their personal residences.
The Village is represented by Milwaukee Bankruptcy Attorney Randall Crocker, von Briesen & Roper, S.C., (http://www.vonbriesen.com/attorneyprofiles/profiles.aspx?id=42) for Lord knows how many thousands of dollars.
von Briesen & Roper, S.C. is the law firm that current Village Attorney Mike Morse used to work for while he was on retainer before he became the in-house attorney for the Village.
von Briesen & Roper gets thousands of dollars a year from the Village in legal fees.
Milwaukee Receivership Attorney Seth Dizard, O'Neil, Cannon, Hollman, DeJong & Laing S.C., (http://wilaw.com/index.php/attorneys/bio/seth_e_dizard/) has been appointed by Judge Hassin as the receiver of the Menomonee Falls Radisson Hotel operations per Waukesha County Court Case 11-CV-3946 (http://wcca.wicourts.gov/caseDetails.do;jsessionid=92D021BB308DA0414523A421486E26BF.render6?countyNo=67&caseNo=2011CV003946&cacheId=F8890D26A43ED85359485D2C0DE9A88A&recordCount=1&offset=0) .
The operators of the Menomonee Falls Radisson Hotel will have to report directly to Attorney Dizard during the receivership proceedings for all operations that include, but not limited to receipts and expeditures.
The Menomonee Falls Radisson Hotel Business Partners are the subject of a civil fraud lawsuit in Dane County for $1,200,000 where they are accused of converting those funds for personal use to obtain financing for the Menomonee Falls Radisson Hotel as part of a Village Board approved $18,000,000 bond issue in May of 2010.
The Menomonee Falls Radisson Hotel Business Partners are also accused of falsifying account statements to make it appear as though funds were in the account when they weren't for the Green Bay and Beloit hotels that were being managed by the Menomonee Falls hotel partners.
The $1,200,000 funds in question were to be used only for the management of hotels in Green Bay and Beloit for Lodging Investors, LLC per the hotel management agreement with Lodging Investors, LLC and the Menomonee Falls hotel partners since 2006.
Lodging Investors, LLC was to ask a Dane County judge for a court appointed receiver of the Menomonee Falls Radisson Hotel operations on November 23, 2011 because Lodging Investors, LLC believes the Menomonee Falls Radisson Hotel is insolvent or near insolvency according to court filings.
The receiver motion in Dane County has been dismissed because the Village beat Lodging Investors, LLC to the punch and giving the Village the first position to try and recoup a portion of the $18,000,000 that was part of the Menomonee Falls Radisson Hotel renovation in 2010-2011.
The civil fraud lawsuit will continue in Dane County for Lodging Investors, LLC as they continue to try and recoup their alleged $1,200,000 missing funds through a jury trial.
The partners of the Menomonee Falls Radisson Hotel were the main benefactors of the $18,000,000 taxpayer funded bond issue in May of 2010 unanimously approved by the Menomonee Falls Village Board.
The Village Manager, Village Attorney, their agents and the Village Board saw the financials of the Menomonee Falls Radisson Hotel Partners before they approved the $18,000,000 loan that also included spousal consent forms, collateral agreements and joint marital property agreements from the hotel partners in 2010.
Many of the original listed assets of the hotel partners to the Village are now in foreclosure or are the subject of a sheriff sale or judgment littered across the State of Wisconsin involving millions of dollars.
Two of the original 5 partners for the Menomonee Falls Radisson Hotel apparently resigned from the partnership shortly after the Village approved the $18,000,000 bond issue so they could be the contractors to renovate the hotel.
Those former partners are now suing the remaining 3 partners in Waukesha County for nearly $3,000,000 in unpaid contractor bills.
Two of the current partners for the Menomonee Falls Radisson Hotel named in the Dane County Civil Fraud Lawsuit now claim that they either resigned from the partnership or are inactive members of the partnership.
A court appointed receiver typically works with the creditors and the debtors to see if a resolution can be reached to give the parties some time to take care of the immediate issues at hand with delinquent bills that have gone unpaid (http://www.dissolve.com.au/information-centre/receivership/).
Radisson Corporate may pull the franchise depending on the severity of the violations of the franchise agreement between corporate and the Menomonee Falls hotel partners.
The Vanguard first reported on the wisdom of the Village Board putting the taxpayers of Menomonee Falls at such a risk with individuals who at best had a spotty financial background in May of 2011 (http://www.menomoneefallsnow.com/blogs/communityblogs/121502704.html).
The Vanguard also broke the receivership aspect of the story on November 14, 2011 (http://www.menomoneefallsnow.com/blogs/communityblogs/133722163.html).
Conservative talk show host Mark Belling, AM 1130 WISN, also mentioned the Menomonee Falls Radisson Hotel receivership issue on his November 22, 2011 show.
First $700,000 Loan Repayments to Village Taxpayers Missed by Radisson Hotel Owners in 2011
According to Village Records obtained through an Open Records Request, the developer's agreement with the taxpayers of Menomonee Falls required the Menomonee Falls Radisson Hotel Owners to have made 2 $700,000 principal payments on May 1, 2011 and November 1, 2011.
To the best of everyone's knowledge familiar with the developer's agreement, those payments have not been made and would appear to suggest that the hotel owners are in default with the repayment clause of the developer's agreement.
The first two years of the loan repayment are interest free for the hotel owners with a lump sum payment due in May of 2014 by the Village of $18,400,000 according to the Village's Debt Service Schedule on the Village's website page 24 (http://www.menomonee-falls.org/DocumentView.aspx?DID=1564).
The $18,000,000 bond issue of 2010 had an interest rate of 4.25% which would suggest the interest payments would be in the neighborhood of approximately $750,000 a year.
The loan repayment schedule with the taxpayers of Menomonee Falls also required the Menomonee Falls Radisson Hotel owners to make additional Principal Payments in 2012 of $400,000 on May 1 and November 1, $450,000 on May 1 and November 1 in 2013 and $500,000 on May 1 and November 1 in 2014.
It would appear, based on the latest developments, that any principal payments to be made by the hotel owners to the taxpayers are in serious doubt.
The Village Manager, Village Attorney and Village Finance Director to date have refused to answer Open Record Requests and emails regarding the payment matter.
Hotel Employees Concerned
Understandably so, hotel employees are very concerned about the developing news of their employer.
To protect the identity of employees and their potential firing for sharing their concerns, The Vanguard has it on good sources, on the condition of anonymity, that things at the hotel are very stressful as can only be imagined.
Other service companies are starting to come forward suggesting additional unpaid bills by the Menomonee Falls Radisson Hotel Partners.
When those issues can be confirmed, The Vanguard will disclose that information as well.
What's the End Game for Menomonee Falls Taxpayers?
This is a very sad and unfortunate situation for all parties involved, especially the taxpayers of Menomonee Falls.
No one can possibly be happy about this as it will take a long time to get everything figured out legally while bills go unpaid for innocent people.
Those individuals whose responsibility it is to make sure due diligence is completed before an agreement of this magnitude is completed need to be held accountable.
The facts are what they are.
The results will be what they will be.
Everything happens for a reason and it will become abundantly clear soon why this happened.
The good folks of Menomonee Falls need to start looking to the future immediately to see what can be done to get past this mess to recoup as much of the $18,000,000 as possible.
Please leave your comments as to what you would like to see done.
Here's some questions that have been asked of The Vanguard:
1. Will the hotel ever make it out of receivership?
2. Will the hotel have to be auctioned off at $.10 or $.20 cents on the dollar?
3. Will Radisson Corporate pull its franchise?
4. Should Village Officials and Village Board Members be held accountable for this knowing full well what the risks were with the partners financials and yet choosing to go ahead anyway with the $18,000,000 bond issue?
5. Should the proper legal authorities be contacted to investigate whether or not there are any potential criminal issues along with the existing civil matters pending in different counties throughout the state?
6. How should Village Officials and the Village Board proceed to make up for the lost principal payments and interest?
7. Should the taxpayers pick up the entire tab for what appears to be this gross negligence on behalf of the hotel owners and the Village Officials?
8. I don't know if this stuff really true?
9. You may have jumped the gun and Isn't it better to have a Radisson in foreclosure looking to be sold instead of the eyesore that was there?
Although that seems to be such an empty greeting with all of this swirling around the village, we do have a lot to be thankful for and as Americans we will get through this.
We always do!