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The Vanguard

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.

Another Radisson Hotel Owner Files Chapter 7 Leaving Falls Taxpayers on the Hook for $18,000,000+

grosskopf radisson bankruptcy vanguard chapter 7

Just when taxpayers didn't think the Falls Fiasco (Radisson Hotel) could get any worse, another Radisson Hotel Owner has filed personal Chapter 7 Federal Bankruptcy papers in the Western District U.S. Bankruptcy Court in Madison.

Dean Grosskopf, 22.5% owner of the Radisson Hotel on Main Street in Menomonee Falls, filed federal bankruptcy papers for Chapter 7 on November 27, 2012 Case 3-12-16413 (www.wiwb.uscourts.gov).

Grosskopf also listed his some 132 creditors for nearly $4,000,000 on December 11, 2012 when he had told the Village and guaranteed to them that he had a net worth of nearly $5,000,000 in April of 2010 as a condition to qualify for the some $18,000,000 taxpayer funded loan.

That's a swing of almost $9,000,000 in a very short period of time.

Either someone lied about their financials and the Village willingly and knowingly accepted that or someone who was near bankruptcy was simply able to con even more people in to giving away millions of dollars without ever expecting it back.

Chapter 7 bankruptcy is often referred to as liquidation where the debtor has no intention of ever paying his creditors back.

Unlike Chapters 9, 11, 12 and 13, which allow reorganization for debtors, Chapter 7 allows the debtor to walk away from their financial liabilities and responsibilities typically without prosecution or jail time (http://www.the-bankruptcy-directory.com/overview.html).

Grosskopf has a litter of completed or pending financial judgments since 2009 or so across the State of Wisconsin that may include, but may not be limited to foreclosure(s), eviction(s), financial judgment(s), going out of business, loss of home, loss of condo, repossessions, etc.

Grosskopf's business, Professional Hospitality - Sun Prairie, is also out of business and their website can no longer be found on the internet.

Grosskopf makes the second of the 5 Radisson Hotel Owners to have filed Chapter 7 personal federal bankruptcy in the last 24 months following David Gilbert, 10% owner of the Radisson Hotel, who filed in late 2010 for over $106,000,000 shortly after he received a $1,006,000 cash advance from the taxpayers of Menomonee Falls in late May of 2010 for his business, Gil-Her Construction - Sun Prairie, which is also out of business and whose website can not be found on the internet. 

Gilbert had told the Village and guaranteed to them that he had a net worth of nearly $4,600,000 in April of 2010 as a condition of receiving the $18,000,000 taxpayer funded loan.

Gilbert's federal bankruptcy case number is 3-10-17595 (www.wiwb.uscourts.gov) and is awaiting a final disposition.

Harbinger of Things to Come

Grosskopf's recent bankruptcy filing within the last two weeks can only be interpreted as a hint of about what is to happen to the taxpayers of Menomonee Falls and their $18,000,000+ taxpayer funded loan to the ownership group of the Radisson Hotel.

The taxpayers of Menomonee Falls, in all likelihood, will not only hold the $18,000,000+ debt on the Radisson Hotel, they will also get the management and full ownership responsibilities of the hotel if Waukesha County Judge Kieffer issues that order at the next hearing in early February of 2013.

A Colossal of Failures

A very small minority of Menomonee Falls taxpayers in person and in writing begged and pleaded with the Village Board, Village Manager, Village Attorney, Village Police Chief and the Waukesha District Attorney to intervene and not allow the taxpayers to be defrauded by the Radisson Hotel Ownership Group of the $18,000,000 + as far back at 2009 only to be laughed at, mocked, scorned and ridiculed for raising any concerns.

The District Attorney, in writing, went as far as to characterize some of those who brought this matter to his attention as far back as early 2009 as, "...the boy who cried wolf" and "...a hoist in his own petard" when he, with his "years of prosecutorial experience", dismissively said in writing, "I can't find any wolves in Menomonee Falls with this."

Really Mr. DA?

When the former municipal judge of Menomonee Falls and a sitting Village Trustee asked for cash under the table from two of the original potential hotel owners in exchange for getting votes from the Village Board to approve their project, which in part, may have led to the municipal judge having to resign from office for taking cash at his residence and being disbarred by the Wisconsin Supreme Court's Office of Lawyer Regulation.

How was the DA unable to find any wolves in Menomonee Falls?

Is it because the Village President's name appeared on the DA's 2006 Campaign Brochure endorsing the DA's bid for office?

Is it because a Village Trustee(s) and a Community Development Authority Member(s) contributed to the DA's Campaign Account?

Is it because the DA is more concerned about re-election and getting support from the Menomonee Falls Police Chief, Village President, Village Board, Village Manager, Village Attorney, the Jeskewitz's, Greco's, Rechlicz's, Steliga's, etc.?

The hotel project in 2010 was doomed from the beginning and no one in the private sector would have given the hotel owners any money let alone $18,000,000 not to mention the low value of the property ($1,800,000), the inflated revenue projections, the questionable ownership group, debt tied to the property and the unethical relational history between some of the hotel owners, Village Board and municipal judge.

Too bad the Village Board, in 2003-04, wouldn't set aside their Jim Jeskewitz Syndrome of, "...we're going to fight him on everything", referring to the Village President at the time, and implement the original plan as part of the Main Street Redevelopment to help the hotel owners get private financing thus eliminating the taxpayers from having to now eat the $18,000,000+ loan that is in default, receivership and foreclosure.

Unfortunately, as is the case in Menomonee Falls too many times, there are those who are more concerned about people, personalities and politics instead of good public policy and doing the right thing to expand the tax base, create jobs, enhance commerce and improve tax revenues.

The hotel closed in 2006 facing potential bankruptcy and foreclosure and sat empty until it opened in June of 2011.

A brief attempt to renovate the hotel occurred in the fall of 2008 with a taxpayer funded bond of $1,200,000, but was quickly halted when the Village Board, once again, didn't do their homework while agreeing to approve a project that couldn't get financing causing the hotel to sit completely gutted for another two years becoming the biggest eyesore in Menomonee Falls.

Generous Terms of the Taxpayer Funded $18,000,000+ Radisson Hotel Loan Revisited

The following list is a partial disclosure of what preferential treatment the hotel owners received from the Village Manager, Village Attorney and Village Board as part of their $18,000,000+ taxpayer funded loan in May of 2010:

  • Hotel owners had to submit by March 31, 2010 their financials, collateral set-offs, marital property agreements, spousal consents and evidence of $1,200,000 in cash in case the $18,000,000 wasn't enough to renovate the hotel once the project began.
  • Hotel owners guaranteed the Village they were collectively worth $24,400,000 including full disclosure of all assets and liabilities.
  • One of the hotel owners, David Gilbert, Gil-Her Construction, slipped away to Nevada on March 15, 2010 to divest himself of most of his assets with 14 Irrevocable Trusts and had some 9 pending or finalized financial lawsuits against him at or about the same time of his loan application with the Village and didn't disclose any of these transactions while guaranteeing the Village that his information and assets were current and accurate.
  • Village Board, upon the recommendation of the TIF District Attorney, Village Manager and Village Attorney, approves the project and agrees to sell the bond in April of 2010 for the principal amount of $17,650,000 at 4.25% that carried minimal annual initial interest payments of $750,000 with no required principal payments as the bond was going to be re-financed in May of 2014.
  • The Village Board gave the hotel owners the first two years of the 4-year mortgage note interest free and asked the taxpayers to pick up those interest payments out of the $18,000,000+ loan that totaled $3,342,000.  Village Manager won't release the records to show who is making the interest payments on the $18,000,000 bond issue.
  • The Village Board asked the hotel owners to make semi-annual principal payments of $700,000 in 2011, $400,000 in 2012, $450,000 in 2013 and $500,000 in 2014 for a total of $4,100,000.
  • No payments have been made to the taxpayers of Menomonee Falls by the hotel owners.
  • The hotel owners have not made any principal payments and are currently in default on the loan and in a court appointed receivership management agreement with Judge Kieffer.
  • The Village Board paid off 3 outstanding loans on the hotel of $2,750,000 before any funds were used on the hotel renovation.
  • The Village Board advanced Gil-Her Construction, now bankrupt and out of business, $1,006,650 in cash before any work was done on the hotel.  Gil-Her Partners were also 2 of the 5 hotel owners and one of them (Gilbert) filed Chapter 7 for over $106,000,000 shortly after he got his cash advance from the taxpayers of the Falls in May of 2010.
  • The Village Board advanced the hotel owners two - $10,000 cash payments.
  • The Village Board paid the first Radisson Hotel fee of $65,000.
  • The Village Board advanced Professional Hospitality (Grosskopf) $100,000, which is now out of business and the owner filed Chapter 7 in November of 2012 for nearly $4,000,000 when he had guaranteed the Village that he had a net worth of nearly $5,000,000 in April of 2010.
  • The Village Board advanced Stewart Title $15,410.
  • The Village Board reserved $1,305,562 for the interest free payments to the hotel owners for the first two years.
  • The Village Board advanced the bond salesman's commission of $161,348 for the $18,000,000 taxpayer funded loan.
  • The Village Board held back $1,258,133.28 in a retainage account to make the final payments to contractors when the work was completed.

Legal Wrangling Continues

While trying to keep track of all of the legal maneuvering involving $18,000,000 taxpayer funded loan for the hotel owners and the Village can be dizzying, the following partial summary will somewhat help the taxpayers to figure out what the end game is and how much money will be lost by the Village Manager, Village Attorney and Village Board:

  • Village filed for and received receivership status over the hotel in November of 2011 with the appointment of Attorney Seth Dizard whose responsibilities were to oversee all of the operations, receipts and expenditures for the hotel while in all probability being paid an hourly fee of somewhere between $250 to $500 for his services.  Village Manager won't release the fees paid to Seth Dizard.
  • Village Manager is quoted as saying in late 2011 early 2012 that the hotel is, "...doing very well", but refuses to release any records of the hotel operations even though taxpayers sold a bond for $18,000,000 to loan funds to the hotel owners for renovation.
  • Radisson Hotel Owners sued by Wisconsin Workforce Development in early 2012 for not paying unemployment taxes.
  • Various lawsuits pop up with hotel owners suing each other for various reasons citing mismanagement, restraining orders, financial accusations, etc. in early 2012.
  • Greg Raupp, Madison hotel owner, sues Radisson Hotel Owners in late 2011 for stealing $1,200,000 from him that was presumably used by the Radisson Hotel Owners to secure the $18,000,000 taxpayer funded loan from the Village in April of 2010.
  • Village hires another attorney in late 2011 early 2012, Randy Crocker, from the Village Attorney's former law firm, to "represent" the Village's interest on the $18,000,000 taxpayer funded loan presumably at an hourly rate of somewhere between $250 - $500.  Village Manager won't release the fees paid to Randy Crocker.
  • Moody's Credit Service Agency lowers and or assigns a "negative outlook" on the Village's credit rating in May of 2012 for at least 18-24 months due to the Radisson Hotel Owners defaulting on the $18,000,000 taxpayer funded loan.  Village Manager won't release pertinent communications between the Village and Moody's.
  • Sub-contractors begin to make a lot of noise at Village Board Meetings in June of 2012 wanting their final payments of some $700,000 for completed work from early 2011.
  • Village advances another nearly $180,000 of taxpayer funds to the Radisson Hotel Owners April - June of 2012 for employee payroll, computer room reservation contract and another Radisson Franchise Fee.  Crocker and Dizard promised the taxpayers that it would be paid back by August 31, 2012.  An outstanding balance of $144,000 remains for the original additional loan of $180,000 as of December 2012.  Village Manager won't release the records regarding this request and payback summaries.
  • Sub-contractors sue the Village and Radisson Hotel Ownership Group for receivership of the now bankrupt Gil-Her Construction, whose two owners are part of the Radisson Hotel Ownership Group, in September of 2012.  Hearing was scheduled for December of 2012, but has been postponed.
  • Crocker and Dizard, at the Village's direction, petition the courts in November of 2012 to have the Radisson Hotel Ownership Group and Management Team removed from the hotel in order to get a clean title on the hotel so it can be sold.  Hearing scheduled for February of 2013.
  • Court documents from November 19, 2012 will show that Grosskopf and his assistant were paid some $14,000 a month since 2011 to "manage" the Radisson Hotel even though Grosskopf was preparing his Chapter 7 filing at the same time and he was in default on the taxpayer funded $18,000,000 bond issue.
  • Court documents from November 19, 2012 will show that Heyden was accused of taking some $318,000 from the Radisson Hotel since 2011 and "double-booked" a van from the hotel and another business of his while defaulting on the $18,000,000 taxpayer bond issue.  Heyden was also accused of violating the restraining order conditions placed on him by the Waukesha County Courts involving his being on the grounds of the hotel complex.
  • Another Radisson Hotel Owner (Grosskopf) filed Chapter 7 Bankruptcy on November 27, 2012 in U.S. Western Bankruptcy Court in Madison.

If Crocker and Dizard were hired by the Village and appointed by a judge as receiver respectively to oversee the operations of the Radisson Hotel and the Village's best interest for the $18,000,000 taxpayer funded bond issue, what have the two of them been doing for the last year without noticing or questioning any of the financial transactions between Heyden, Grosskopf and others to the tune of nearly $500,000?

Grosskopf's Chapter 7 Filing Summary

The following is a brief summary of the details for Grosskopf's Chapter 7 filing:

  • Some 132 creditors are listed that include individuals, trusts, banks, business partners, businesses, government entities, law firms, tax collection agencies, etc.
  • Grosskopf's 4 Radisson Hotel Partners are listed in the filing without an amount of what is owed them.
  • Total liabilities are nearly $4,000,000 and perhaps a lot more due to most of the creditors being listed without what is owed them.
  • Income averaged around $100,000 for the last 3 years thanks to the Radisson Hotel.
  • Sold or will lose the following homes, cars, boats and personal items to raise cash over the last two years:

            1. 1960 Pontiac Bonneville for $40,000

            2. 2003 50th Anniversary Corvette Roadster for $25,500

            3. 1990 Corvette Roadster for $10,250

            4. 1984 Sea Ray 270 Sundancer in Florida for $12,000

            5. Rolex watch for $19,800

            6. 3 other older cars for $12,000

            7. Liquidated an annuity for $62,000 and an IRA for $49,000 

            8. 2004 Sea Ray 390 MY with a balance due of $338,620

            9. Door County Condo with a balance due of $416,656

           10. Will dissolve, liquidate or lose some 13 LLC's (Limited Liability Corporations)

  • Will pay the bankruptcy attorney $360/hr and has a balance due of $8,506

The Vanguard has learned that there are "people" associated with this entire mess from its inception that would love to talk to the authorities because they are not going to take the rap for any of the Radisson Hotel Partners if and when the whole thing goes down.

Gee, maybe the DA of Waukesha County would like to talk to these "boys who are willing to cry wolf" as it appears that there are some wolves in Menomonee Falls for the DA to find if he would be more concerned about enforcing the law instead of apparently protecting his "friends" in Menomonee Falls who are responsible for this mess because they have given to his campaign(s) and let him use their name(s) on his campaign literature.

Oh that's right, these people probably suffer from their own "hoist in their own petard" syndrome as the DA describes it.

What's the end game for the taxpayers of Menomonee Falls?

Let's be frank and candid, the taxpayers are going to end up with a hotel thanks to the Village Manager, Village Attorney and Village Board and will try to sell it to minimize the impact on the loss of $18,000,000 that is now lost forever.

Like most people on a national level that are not plugged in to the decisions of their government, the overwhelming majority of citizens in Menomonee Falls don't know about the Radisson Hotel and even if they did, probably wouldn't care.

For those that do care, you can contact the following officials to let them know of your thoughts regarding the Radisson Hotel as follows:

Village Board

1. Randy Newman, N74 W153000 Stoneridge Drive, 262-255-0183, trusteenewman@menomonee-falls.org

2. Dennis Farrell, N94 W15987 Cherokee Drive, 262-251-1281, trusteefarrell@menomonee-falls.org

3. Jim Jeskewitz, N80 W15239 Hilltop Drive, 262-251-9595, sjjeskewitz@milwpc.com

4. Jeff Steliga, W209 N9106 Scenic Drive, 262-255-1114, trusteesteliga@menomoee-falls.org

5. Mike McDonald, W162 N7406 Tamarack Trail, 262-255-2365, mmac1883@aol.com

6. Steve Raymonds, N76 W13657 Upper Circle, 262-255-5853, trusteeraymonds@menomonee-falls.org

7. Sharon Ellis, N79 W15360 Goldenrod Drive, 262-255-6478, sellis01@msn.com

Village Manager

Mark Fitzgerald, W156 N8480 Pilgrim Road, 262-532-4241, mfitzgerald@menomonee-falls.org

Village Attorney

Mike Morse, W156 N8480 Pilgrim Road, 262-532-4251, mmorse@menomonee-falls.org

3 of the Village Trustees (McDonald, Steliga and Raymonds) who voted for the Radisson Hotel are up for election in April of 2013.

Let's hope someone(s) will have the courage, time and effort to run for Trustee to prevent this type of situation from every occurring in Menomonee Falls again.

Otherwise, the same people will get elected without opposition subjecting the taxpayers to even more public policy deals like this.

Nomination papers are due the first week in January at the Clerk's Office (532-4200).

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