A subsidiary of the Samanta Roy Institute of Science and Technology has once again staved off a foreclosure sale with an 11th hour bankruptcy filing.
Midwest Properties of Shawano, LLC, filed a new Chapter 11 bankruptcy petition in Delaware on Tuesday afternoon, heading off a scheduled sheriff's sale Wednesday morning of two apartment buildings in Shawano.
The properties at 463 Humphrey Circle and 1024 East Fifth Street were already in receivership as a result of a civil suit brought by Fox Communities Credit Union of Appleton.
Midwest Properties entered into a land contract in 2004 to purchase the apartment buildings from Robert and Shannon Broder. Midwest agreed to pay $575,000, with a down payment of $100,000. The remaining $475,000 was to be paid in monthly installments.
Midwest has maintained in court documents that it paid the Broders $5,000 a month for three years under the assumption they were using the money to pay off the mortgage.
FCCU filed suit against the Broders in 2008, naming Midwest Properties as a defendant with a subordinate claim on the apartment properties. The properties were put into receivership and a foreclosure judgment was granted in September 2008, but has been delayed by various bankruptcy petitions.
Midwest's new filing Tuesday has been assigned to U.S. Bankruptcy Judge Kevin Carey, who dismissed the last Midwest Properties bankruptcy petition in December, along with a petition filed by another SIST subsidiary, Midwest Oil of Minnesota, LLC.
In that ruling, Carey agreed with a motion to dismiss from the U.S. Trustee's Office citing assertions of gross mismanagement, continuing loss to the estates and an absence of a reasonable likelihood of rehabilitation.
Still lingering from that bankruptcy case, however, is an adversary proceeding filed by Midwest Properties alleging the Shawano Leader and nearly two dozen other individuals and entities are part of a racist conspiracy led by Shawano Mayor Lorna Marquardt. SIST founder Avraham Cohen is of East Indian descent.
Midwest Properties has been ordered to show cause why the adversary proceeding should not be dismissed. A hearing on the matter is scheduled for March 3.
Both Midwest Properties and Midwest Oil were originally part of a bankruptcy petition filed by SIST and six of its subsidiaries in Delaware in March 2009. That petition, which also put a hold on the pending foreclosure sale of three Shawano gas stations, was eventually dismissed in federal court.
SIST is appealing that ruling in the Third Circuit Court of Appeals. However, Midwest Oil and Midwest Properties removed themselves from the appeal.
Midwest Properties filed independently in U.S. Bankruptcy Court in Milwaukee, but the case was subsequently sent back to the Delaware court.
Midwest Oil filed a petition in U.S. Bankruptcy Court in Minnesota - staving off a pending sheriff's sale of one of Midwest Oil's properties. That case was also transferred back to Delaware. Midwest Oil filed another new bankruptcy petition in U.S. Bankruptcy Court in Minnesota last month.
In December, the foreclosure of a racetrack property in Wescott was stalled by a new Delaware bankruptcy petition filed by SIST subsidiary U.S. Acquisitions and Oil Inc.
Southwest Guaranty, Ltd. filed suit against SIST and USAO in December 2008 alleging the USA International Raceway, operated by USAO, and SIST defaulted on a $2.2 million loan. The racetrack was put into receivership last year. The filing came the day before a motion to grant the foreclosure was to be heard in Shawano County Circuit Court.
