Oneida Seven Generations Corporation’s Scheme Partner Ron Van Den Heuvel’s “Byzantine Business Structure” And “Half-Hearted Effort By Management To Buy Time” Eviscerated By U.S. Trustee’s August 26, 2016 Motion To Dismiss Chapter 11 Bankruptcy Filing Of Green Box NA Green Bay LLC Incinerator Scheme In U.S. Bankruptcy Court Wisconsin Eastern District Docket #16-24179-beh; UPDATE: Green Bay Mayor Jim Schmitt Pleading Guilty To Violating State Campaign Finance Laws Cited In Criminal Complaint Noting OSGC’s Illegal Campaign Contribution; GREEN BAY PRESS-GAZETTE EDITORIAL BOARD: “GREEN BAY MAYOR MUST STEP DOWN”; The Guardian Published Leaked Court Documents From ‘John Doe’ Campaign Finance Investigation of WI Gov. Scott Walker

  

02/13/2017 UPDATE:

 

9/17/2016 UPDATE:

We call on the City Council to remove Schmitt from office “for cause.” A three-quarters majority, or nine of the 12 City Council members, need to approve such a move.

State statutes list “cause” as “inefficiency, neglect of duty, official misconduct, or malfeasance in office.”

Schmitt’s actions certainly qualify as malfeasance — a term often used for public officials who engage in illegal activity.

Plain and simple: Schmitt admits breaking the law. His agreement to plead guilty shows that. The criminal complaint outlines how it was done. We believe it was intentional and the seriousness of the crime is compounded by the lengths that were taken to cover it up.

When given the opportuniy to amend his campaign finance report and rectify the situation, Schmitt tried to cover it up.

Schmitt faces three charges – making false statements on his finance reports, attempting to accept funds from someone other than the reported contributor and attempting to accept funds in excess of the allowable individual contribution.

The subpoenas for the financial records of the Friends of Jim Schmitt released Monday [September 12] and the affidavit shows issues throughout the four years of the election cycle, from 2011-2015. The records show more than $16,000 in questionable or illegal donations in that time frame.

Schmitt will make his initial appearance in front of Outagamie County Judge Mitchell J. Metropolous on Oct. 5. We believe this case will continue to be a distraction and the sooner the council acts, the better.

We also believe Schmitt’s actions outlined in the affidavit and criminal complaint show a disregard for the campaign finance law, an attempt to cover up crimes and a desperation to hold onto an elected office regardless of the cost of doing so.

In this case, the cost is his job. If Schmitt won’t resign, the City Council should remove him.

 

 

9/14/2016 UPDATE:

Mayor Jim Schmitt relabeled more than a dozen illegal campaign contributions as coming from people other than the true donor, according to newly unsealed court records.

The documents – prosecutor affidavits seeking authorization to subpoena Schmitt’s bank records – show a larger number and variety of violations than were listed in a criminal complaint filed last week in Brown County Circuit Court.

The affidavits made public Monday show widespread campaign finance reporting issues spanning the full four years of Schmitt’s previous term in office. The records had been sealed since they were initially filed in June 2015.

According to the records:

» Schmitt accepted donations over the legal limit of $1,040 from 20 individuals. In all, the excess donations totaled $11,175.

Schmitt returned just $370 to two of the individuals in January 2015 after some aldermen complained about the violations. Schmitt relabeled the remaining 18 donations as coming from the original donors’ family members.

» Schmitt accepted $2,550 from nine businesses. State law prohibits corporations from donating to political campaigns. Schmitt returned just four of those donations.

» Two donors wrote checks directly to a third party who purchased tables for $325 at a fundraiser. Landgraf noted the transactions are highly irregular.

“In my review of campaign finance account records over the past 10 years, I cannot recall ever seeing this type of check ‘sign-over,'” Landgraf wrote in an affidavit.

 

Related:

Six years after the supreme court opened the floodgates on money in politics with its Citizens United decision, most Americans are well aware how broken our campaign finance system has become. Eighty-four percent of us say there’s too much money in politics, according to a New York Times poll, and two out of three say the wealthy have more influence than everyone else.

Voters understand that intuitively. But rarely is it possible to actually see inside the inner workings of our rigged campaign finance system and observe how the wealthy and powerful exploit it for their own benefit.

That’s what 1,500 pages worth of leaked documents, obtained by the Guardian’s Ed Pilkington, allow us to do. They reveal internal emails that show connections between Wisconsin’s Governor Scott Walker, his aides and wealthy donors – including Donald Trump. The contents are both depressingly predictable and outrageous.

In addition to Trump, many of the most powerful and wealthy rightwing figures in the nation crop up in the files: from Home Depot co-founder Ken Langone, hedge-fund manager Paul Singer and Las Vegas casino giant Sheldon Adelson, to magnate Carl Icahn. “I got $1 million from John Menard today,” Walker says in one email, referring to the billionaire owner of the home improvement chain Menards.

Among the new material contained in the documents are donations amounting to $750,000 to a third-party group closely aligned to Walker from [Harold Simmons] the owner of NL Industries, a company that historically produced lead paint. Within the same timeframe as the donations, the Republican-controlled legislature passed new laws making it much more difficult for victims of lead paint poisoning to sue NL Industries and other former lead paint manufacturers (the laws were later overturned in the federal courts).

The John Doe files also provide new insight into the extensive efforts made by allies of Scott Walker to help a conservative member of the Wisconsin supreme court, David Prosser, hang onto his seat in a 2011 re-election. A network of like-minded groups and campaigners channeled $3.5m in undisclosed corporate funds to pay for TV and radio ads backing the judge.

The push was seen as vital, the documents disclose, as a means of retaining the rightwing majority of the court and thereby preserving the anti-union measures introduced by Walker. “If we lose [Justice Prosser], the Walker agenda is toast,” one ally writes in an email sent around to the governor’s chief of staff and several conservative lobbyists.

In 2015, Justice Prosser refused to recuse himself from a case in which the state supreme court sat in judgment over the John Doe investigation, despite the fact that the investigation focused on precisely the same network of lobbying groups and donors that had helped him hang onto his seat. The judge joined a majority of four conservative justices who voted to terminate the investigation and destroy all the documents now leaked to the Guardian.

______________________________
See also:

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Another example of the pattern is the casual comment Walker dropped into an email to his fundraiser dated 14 June 2011:“Also, I got $1m from John Menard today.”Eight days later a check for $1 million is cut on a corporate check of Menard Inc, the billionaire John Menard’s home improvement chain Menards, and made out not to the governor’s campaign committee but to Wisconsin Club for Growth. There the donation remained a secret until the publication of the Guardian’s leaked files. …

The email trail shows a pattern of behavior developing: Walker meets up with big corporate donors and encourages them to contribute unlimited sums of money through WCfG in secret, then shortly after the checks start to flow. In June 2011, the emails show, the governor had dinner with the CEO of the largest privately owned trucking company in the US, Schneider National [a tenant of Oneida Seven Generations Corporation], in the hope of getting him and his peers to donate $250,000. 

“Stress the donations to [Wisconsin Club For Growth] are not disclosed and can accept Corporate donations without limits,” Walker’s talking points said.

Two checks are recorded in the John Doe files from Schneider, both made out to WCfG and totalling $65,000.

The Schneider checks, like several others included in the files, were cut on corporate checks in the name of the company itself. It has long been a rule under Wisconsin state law, commonly known as the “corporate ban”, that corporations are not allowed to make direct political donations; they are only allowed to fund third-party groups that have to be fully independent of candidates, or spend money themselves on political TV advertising so long as the expenditure is declared. …

The John Doe files reveal that [Harold Simmons,] the billionaire owner of NL Industries, one of America’s leading producers of lead used in paint until the ban, secretly donated $750,000 to Wisconsin Club for Growth at a time when Walker and his fellow Republican senators were fighting their recall elections. Also in the same time-frame, the Republican-controlled senate passed, and Walker signed into law, legal changes that attempted to grant effective immunity to lead manufacturers from any compensation claims for lead paint poisoning.

Since the laws were passed, the federal courts have stepped in and overturned key elements of them, leaving NL Industries – or National Lead Company as it was once known – still facing many legal challenges. But the point remains: had the new provisions been allowed to stand, they had the potential to save the company and others like it millions of dollars in damages.

Lawyers working on the lawsuits argue that at stake were the rights of hundreds of children from poor urban areas whose lives were devastated by lead poisoning inhaled from paint when they were growing up. “These children were perfectly innocent. They entered life with all the gifts and health that God gave them and were devastated by this neurotoxin,” said Peter Earle, the principal attorney on 171 cases that are currently ongoing against NL Industries and other former manufacturers of lead paint.

Republicans in the Wisconsin legislature made an initial attempt to change the law on the liability of lead paint producers shortly after Walker became governor. As the name implied, Act 2 was one of his opening gambits that he rammed through the legislature in less than a month after he came to office in January 2011. 

One of Act 2’s key provisions was to tighten tort law to make it much more difficult for lead victims to sue. …

The measure in effect granted immunity to NL Industries and other lead producers from any new claims for compensation.

Less than three months after the law was enacted, Simmons arranged for the first and largest check– of $500,000 – to be paid directly from Contran Corporation, his business empire, to Wisconsin Club for Growth. It landed at the time that the six senators were in their recall battles.

Later that year, Walker’s interest in soliciting more money from Simmons for use in his own personal recall election is made plain in an email among the John Doe files dated 14 November 2011. It was written by Keith Gilkes, Walker’s then senior campaign adviser. … 

The Gilkes memo sets out for Walker some of the “red flags” associated with Simmons and other potential corporate donors “so you are aware of what you might need to defend in terms of contributions from donors when these are disclosed”. He warns Walker that [Harold] Simmons had a controversial track record for reportedly dumping toxic waste in Texas. Gilkes pointed to an article by Dallas Magazine in which the billionaire was dubbed “Dallas’ most evil genius”. The memo also notes that Simmons avoided having to pay millions of dollars in damages to pay for medical treatment for child victims of lead poisoning in Wisconsin’s largest city Milwaukee after an appeals court cleared NL Industries of causing a public nuisance and dismissed a lawsuit brought by the city for $52.6 million.

[O]nly a month later, a second corporate check from Contran Corporation for $100,000 was sent to [Wisconsin Club for Growth]. 

At this point, the Wisconsin legislature and Governor Walker made a renewed pitch to change the law to the benefit of NL Industries and other historic manufacturers of lead paint. They had already passed Act 2, but that only covered new claims, leaving the company still facing a mountain of lawsuits that were already ongoing.

So the legislators had another go. In the same month as the third check landed, senate Republicans introduced a bill that would make the effective immunity for former lead paint manufacturers retroactive, thereby scuppering all existing lawsuits. 

That attempt failed to pass the Wisconsin legislature. But even then the Republican group did not give up. In 2013, after all the recall elections had been fought and won, partly with the benefit of Harold Simmons’ support, the legislators tried one more time to pass a bill making the immunity retroactive. 

Another FOIA document shows that NL Industries’ lobbyist directly suggested to the Republican leader in the state senate the language that should be added to existing law to make the effective immunity retroactive. …

Two months later GOP senators slipped into a budget bill an amendment that contained the same four words proposed by NL Industries: “whenever filed or accrued”. The amendment was introduced after midnight just before the bill was finalized. It can be found by anyone who looks hard enough on page 548 of a 603-page bill that Scott Walker duly signed into law. 

NL Industries used the amendment to press for dismissal of the negligence lawsuits it was facing. But the move failed. A federal appeals court stepped in and ruled that such a retroactive granting of corporate immunity was a violation of the US constitution.

As for Scott Walker, [Peter Earle, the principal attorney on 171 cases that are currently ongoing against NL Industries and other former manufacturers of lead paint] said: “The governor has chosen to ignore the children and instead fought tooth and nail for the corporations that did this. I don’t have words to describe that conduct.”

 

[I]n July 2014 a federal appeals court ruled that a lawsuit by one of those children could continue despite the 2013 state law. The boy who suffered lead poisoning can sue a half dozen major manufacturers of paint used on the Milwaukee house where he lived, based on a theory approved in a controversial 2005 Wisconsin Supreme Court decision, the 7th Circuit Court of Appeals in Chicago ruled.

In an interview Wednesday, the boy’s attorney, Peter Earle, said he was “trembling with rage” at the news of the contributions by the industry, saying that they were meant to block claims by “the most vulnerable among us.” He said that Republican leaders in Wisconsin had benefited from industry money and then acted to try to retroactively block lawsuits by children harmed by lead paint.

“What I see is a corrupt morass of government in Wisconsin that has been fueled by corporate money,” Earle said. “How can people have faith in a system like that?”

State Sen. Jon Erpenbach (D-Middleton) said he was shocked by the lead paint company’s donations.

“He answers first and foremost to large donors and that’s kind of underscored in the lead paint (example),” Erpenbach said of Walker.

He said it was frustrating the state Supreme Court had concluded prosecutors weren’t allowed to look into whether there was a connection between the money from the lead paint industry and legislation helping it. He said conservatives on the state court benefited from their own decision to shut down the investigation into these contributions.

“A majority of the Supreme Court benefitted directly from the dark money that flowed into this state,” he said.

The investigation focused on whether Walker’s campaign had illegally coordinated with the Wisconsin Club for Growth and other conservative groups. The documents released Wednesday once again made clear the GOP governor was active in raising money for the group.

One donor gave the group $10,000 in 2011, writing on the check’s memo line that he made the contribution “because Scott Walker asked.”

It was not clear who leaked the documents to the Guardian. Some of them have been already disclosed during various court cases and reported by the Journal Sentinel, among other media outlets, while others have never been released before because they were filed under seal or never showed up in court documents at all.

 

The release comes weeks before the U.S. Supreme Court is set to consider a petition by the prosecutors to overturn a Wisconsin Supreme Court 4-2 decision quashing the investigation. The documents provide additional insight into why the prosecutors argue conservative justices Michael Gableman and David Prosser should have recused themselves from the case.

Walker, in a May 2011 letter to Republican strategist Karl Rove, wrote that his chief political adviser R.J. Johnson ran the efforts to elect Gableman in 2008 and re-elect Prosser in 2011. Johnson was under investigation for his role in coordinating advertising for both the Walker recall campaign and Wisconsin Club for Growth. … 

The documents reveal previously unknown donations to the group, such as $750,000 from [Harold Simmons] the billionaire owner of NL Industries, which produced lead used in paint before it was banned, given in three checks in April and December 2011 and January 2012. The company stood to benefit from laws Walker and the Republican Legislature passed in 2011 and 2013 that granted immunity to lead manufacturers from lawsuits seeking damages for lead poisoning. …

Previously released court documents showed mining company Gogebic Taconite gave the group $700,000. Walker and Republicans later eased mining regulations to help the company build an iron ore mine that ultimately fizzled.

The Wisconsin Supreme Court halted the secret investigation last year saying it was based on an invalid legal theory. The court also initially ordered all of the evidence, much of which the Guardian obtained from an unnamed source, be destroyed. It later ordered the evidence be turned over to it for safekeeping, though that won’t happen until all appeals of its decision are exhausted.

The U.S. Supreme Court is scheduled to review the petition to hear the case on Sept. 26. It could decide whether to accept or reject the case soon after.

Since the state Supreme Court’s ruling, the Republican-controlled Legislature changed state law to clarify that the activities being investigated are legal. Specifically the law allows campaigns to coordinate with so-called issue advocacy groups.

In a court filing last month…the prosecutors noted that the new law did not include a provision retroactively legalizing activity that was previously prohibited.

“Accordingly, respondents who are subjects of the investigation may yet be prosecuted,” they wrote.

 

9/12/2016 UPDATE:

Monday morning, FOX 11 Investigates received the returns and requests for each subpoena, which were filed and sealed in September of [2015]. …

Part of them highlight two December 2013 donations, listed on receipts from the initials C S.  Landgraf, the prosecutor, says the dates are consistent with a corporate contribution from Cantilever Studios, LLC, of Suamico.  But an amended report filed in January of last year lists donations on those dates from Carl Schmitt – the mayor’s brother and a priest in Sturgeon Bay.

Landgraf says “The ‘C S’ amendment is remarkable for several reasons.”  He notes a corporate donation would be prohibited by law, and that the amendment was done at at time when Schmitt’s committee was already being publicly criticized.

According to the criminal complaint, Carl Schmitt told investigators he doesn’t remember donating any money to his brother.  Rev. Schmitt did not respond to FOX 11’s interview request Monday.

 

 

9/9/2016 UPDATE:

Green Bay Mayor Jim Schmitt has agreed to plead guilty to three misdemeanor charges of violating state campaign finance laws [in Brown Co. Case No. 2016CM1239.]

These charges in and of themselves would not disqualify him from being mayor of Green Bay, but the lengths he went to hide mistakes, deceive the public and finesse the law do.

In this case, we call for Jim Schmitt to resign as mayor.

Schmitt was accused of accepting illegal campaign donations and falsifying information on his campaign finance reports.

On Wednesday, after an investigation that lasted over a year, the Milwaukee County District Attorney’s Office filed three criminal charges against the mayor: an attempt to make false statements to an election official, an attempt to accept campaign contributions not belonging to a contributor and an attempt to accept campaign contributions in excess of limits.

Each one of these is a felony offense, but under the plea deal, by calling each count an “attempt” to break election laws, Schmitt pleads guilty to three Class A misdemeanors instead of felonies.

Bruce Landgraf, the Milwaukee County assistant district attorney who conducted the investigation, outlined the agreement in a letter to Schmitt’s attorney. “Upon Mr. Schmitt’s plea of guilty to the charges contained in the complaint, I will recommend a disposition that does not include jail or probation,” Landgraf wrote.

That’s a good deal for Schmitt, but not for the citizens of Green Bay.

It adds to the reputation of a dysfunctional city government as the mayor and his critics on the City Council have feuded to the point of yelling, swearing and bickering at public meetings.

Even if you can set aside those power struggles, you can’t ignore a criminal complaint that shows deliberate attempts to get around the law when donors made contributions that exceeded limits.

These were not honest mistakes, but concerted efforts to cover one’s tracks.

If a donor gives you a $5,000 check, which exceeds the $1,040 maximum, you return it. If you erroneously accepted it, then you return it when your error is pointed out. That’s an honest mistake.

You don’t keep it and then list five separate $1,000 donations from the donor and four of his family members. That’s deceit.

It’s a lie that Schmitt had a part in. A campaign worker filled out the campaign finance form but left the names blank. “The candidate, Jim Schmitt, however, filled in the name column,” the complaint said.

If you receive two $25 donations from a corporation, which, again, is against the law, when you realize your misstep, or it’s brought to your attention, you return the donations. That’s correcting an honest mistake.

To keep the money and fudge the campaign finance forms is dishonest. In this case, Schmitt accepted two donations from a corporation, Cantilever Studios. On a campaign finance report there were no donations listed from Cantilever Studios, but there were two donations made on the same days for the same amount from “CS.” That report was later amended and Schmitt wrote the name of his brother, “Carl Schmitt,” below “CS.”

Those are only two of the examples, but the criminal complaint shows Schmitt was involved in the deception. They were moves by an elected official who tried to skirt the law instead of returning the funds and risk getting nothing.

It was a ruse to keep two $25 donations.

One of the puzzling aspects of the case is he didn’t need the money. Schmitt ended up with more than $25,000 in the bank after his re-election bid. He didn’t need the $50.

That’s what troubles us the most.

Schmitt was willing to falsify reports in an attempt to keep his office. It’s not like he overlooked something or was ignorant of the law. When informed of the mistakes, he tried to mislead the public.

We can’t accept such deceptive behavior from the top city official, who should be held to a higher standard.

It erodes the public’s trust. In a presidential election year when voters are presented with two candidates whose ethics they question, we’d like to think that on the local level we can count on our leaders to do the right thing.

Sadly, that’s not the case here.

As is often the case in government, the cover-up is worse than the crime. Campaign finance errors by themselves generally don’t rise to the level of needing to resign, but the mayor’s subsequent cover-up and attempts to mislead do. …

[T]he ends don’t always justify the means, and in this case the mayor crossed a line. When confronted with a problem, he tried to bury it instead of addressing it.

He must resign because of the monumentally poor judgment and dishonesty he displayed. Doing so will allow the city to continue to move forward.

 

See Oneida Eye’s previous reporting:

 

9/8/2016 UPDATE:

A constitutional amendment ratified in 1996 bars any person   convicted of a felony or misdemeanor involving the violation of public trust from holding a state or local office. … 

This could be the test case that a lot of us in the political arena have been waiting for,” said Michael Maistelman, a Milwaukee attorney who specializes in representing elected officials accused of breaking election and campaign finance laws.

If this isn’t a violation of the public trust, I don’t know what is,” Maistelman said. … 

Criminal campaign finances cases against local government officials aren’t common, but do come up every few years in Wisconsin.

Former Kenosha County Executive Allan Kehl was sentenced to two years in prison after pleading guilty [to] conspiracy to violate campaign finance laws in 2008 [for having “accepted envelopes stuffed with $100 bills from American Indian casino-backer and former trucking magnate Dennis Troha“].

 

See Oneida Eye’s reporting on the Menominee Indian Tribe of Wisconsin’s corrupt & failed Kenosha casino proposal:

 

 

9/7/2016 UPDATE:

GREEN BAY MAYOR JIM SCHMITT TO PLEAD GUILTY OF VIOLATING STATE CAMPAIGN FINANCE LAWS

Page 3, Corporate Contributions:

Also discussed in the Affidavit in Support of a Subpoena for the campaign finnace bank records filed as part of a subpoena return on September 15, 2015, prior to the filing amendments, the Schmit campaign had accepted contributions from corporations.

For example, the September 30, 2011 Oneida Seven Generations Corporation contribution of $500, the October 14, 2011 JPTR LLC [property management company for which the ‘Registered Agent’ is John Calewarts] contribution of $250, and the April 8, 2014 Lin Liebmann Wied LLC [law firm] contribution of $500 were publicly reported in the name of the business. These were returned to the contributors.

While it was ultimately determined that over the years a number of corporate checks were accepted and not returned, the investigation concentrated on violations of a different nature.

[Footnote: From 2011 to 2014, about ten contributions were accepted from corporations and not returned as of September 2015.]

 

Media coverage:

Green Bay Aldermen Chris Wery, who asked for the investigation into Schmitt’s campaign finances in late 2014, said the investigation didn’t go far enough by looking into alleged illegal corporate donations.

“If you’re going to do a full investigation, why not address everything and put charges out for everything, not just ignore it?” Wery questioned. “And secondly, these are all felonies according to state statutes. They’re all felonies and yet they were all reduced to misdemeanors.”

This is a black eye for Green Bay,” says Alderman Andy Nicholson, one of three city council members who called for an audit of Schmitt’s campaign funds in January 2015. “Having a mayor brought up on charges like this, this is corruption. The mayor also put his personal interest before the public and that is terrible. He should resign because of that.”

Ald. Nicholson, along with Chris Wery and Guy Zima, pointed out about $10,000 worth of illegally or improperly recorded contributions to Schmitt’s re-election campaign. Nicholson expressed frustration with the results of this investigation.

These are felonies that are dropped down to misdemeanors. They should show what else is out there also, they should show the public every single violation which are basically felonies,” Nicholson said. “He was taking illegal contributions for over a decade. He (Schmitt) knows the law, he believes that he’s above the law.

 

A website has appeared calling for Jim Schmitt to resign:

 

Developing…

___________________________________________

 

a:   of, relating to, or characterized by a devious and usually surreptitious manner of operation;

b:   intricately involved;  labyrinthine;

 

Merriam-Webster goes on to explain:

The figurative sense of labyrinthine deviousness first appeared in the late 1930s. It was popularized by its frequent use in reference to the Soviet Union, whose secrecy and despotism were equated by Westerners with what went on in the old Byzantine Empire.

 

Of all the court documents that Oneida Eye has purchased and posted recently, the Editors felt the following one deserved special attention due to the many parallels between the devious & surreptitious (mis)conduct of business operations by Ron Van Den Heuvel’s Green Box NA Green Bay LLC and Ron’s business partners Oneida Seven Generations Corporation and OSGC’s subsidiaries Green Bay Renewable Energy LLC and Oneida Energy Inc., the Boards of which are appointed are overseen by the Oneida Business Committee:

 

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF WISCONSIN

In re: Green Box NA Green Bay, LLC, Debtor

Case No. 16-24179-beh (Chapter 11)

 

UNITED STATES TRUSTEE’S MOTION TO DISMISS OR
CONVERT CASE TO CHAPTER 7

The United States Trustee Patrick S. Layng, by Attorney Amy J. Ginsberg, moves, pursuant to 11 U.S.C. §1112(b)(1), for an order dismissing Green Box NA Green Bay, LLC’s (the Debtor) chapter 11 case because (1) the Debtor’s management is not acting in the best interests of the estate; the Debtor cannot propose a confirmable plan;  (2) the estate is experiencing substantial and continuing losses; there is no reasonable likelihood rehabilitation;  (3) the Debtor’s Schedules and Statement of Financial Affairs are incomplete;  and (4) the estate is administratively insolvent.  In support of this motion, the United States Trustee alleges:

Introduction

1.  The Debtor has fundamental, inescapable financial problems, principally it lacks cash.  The Debtor had no cash at the time this case was commenced and has not grossed any cash from its operations.  In three months, the Debtor reported receiving $450 from its parent company, EARTH [Editors’ Note: Environmental Advanced Reclamation Technology HQ LLC which recently renamed itself Reclamation Technology Systems, LLC / RTS, as opposed to Everett Advanced Reclamation Technology HQ LLC / EARTH 2, for which WDFI.org lists the  ‘Registered Agent’ as EARTH/RTS] , to open the Debtor-in-Possession bank accounts. See Docket Entry #57.  The Debtor relies on cash from related, non-debtor entities to pays its ordinary operating expenses.  Without any cash, the Debtor cannot confirm a plan.

2.  Next, the Debtor’s primary prospect for cash flow relies on third party investment in its two “Kool Units”.  The Kool Units recycle used tires into a variety of commercial products, including carbon black.  The Debtor’s ability to reach third-party investors is questionable because:  (1) while one Kool Unit is assembled and ready to operate, the second Kool Unit lies unassembled in South Carolina;  (2) the Debtor may not control the South Carolina Kool Unit;  (3) the Debtor never operated any Kool Unit on a commercial basis; (4) the Debtor does not own the technology or hold a license to operate the Kool Units.  See Schedule B, Question #60. See Docket Entry #14, p. 8. The Debtor has not provided any proof of any ready and willing investors.

3.  Finally, the Debtor’s management fails to act in the best interest of this estate.  In order to bolster related tenant [EcoHub Wisconsin, LLC (Eco-Hub), formerly known as Green Box Wisconsin LLC, and prior to that Green Box NA Wisconsin OP LLC], management defers collecting rent due from Eco-Hub, leaving the Debtor without cash from the use of its paper conversion facility.  When management sacrifices estate assets to preserve a non-debtor entity, dismissal of this case is appropriate.

Facts

4.  The Debtor is a part of Ron Van Den Heuvel’s (Van Den Heuvel) Byzantine business structure: the Debtor owns a paper conversion facility in DePere, Wisconsin; [EcoHub Wisconsin, LLC (Eco-Hub), formerly known as Green Box Wisconsin LLC and Green Box NA Wisconsin OP LLC] uses the paper conversion facility to convert bulk paper rolls into consumer paper products, and Patriot Tissue, LLC sells the consumer paper products to customers.

5.  While the Debtor was in receivership in the year prior to commencement of this case, Eco-Hub failed to pay rent to the Debtor, owing the Debtor with $1.386 million in back rent.  See Docket Entry #14, p.4. Van Den Heuvel’s management left the Debtor without any cash at the commencement of this case.

6.  After commencement of this case, secured creditor and member, Stephen Smith (Smith) [of GlenArbor LLC / GlenArbor Partners Inc.] took control of the Debtor from Van Den Heuvel.  Still, Smith continues to allow Eco-Hub to occupy the Debtor’s paper conversion facility rent free.  See Docket Entries #40, #51 and #57.

7.  The Debtor’s assets – its manufacturing facility in DePere, the two Kool Units, the $1.386 million in accounts receivable (Eco-Hub’s back rent), are fully encumbered.  See Docket Entry #14, Schedule D.  One of the Kool Units is in South Carolina and subject to a $200,000 possessory security interest.  See Docket Entry #14, Schedule D, page 12.  The Debtor does not have any collateral to offer lenders and investors.

8.  According to the Debtor’s Statement of Financial Affairs, its pre-petition income for 2014, 2015 and 2016 is “unknown.”  Upon information and belief, in 2014 and part of 2015, Eco-Hub’s $74,000 monthly rent accounted for the majority of the Debtor’s revenue.  See Docket Entry #14, Schedule B and Schedule G.  However, that revenue stream came to a halt in mid-2015, when the Debtor became subject to a state court receivership.

9.  The Debtor’s reliance on the Kool Units to generate cash remains speculative.  The Debtor’s Chairman, Smith testified about the Kool Units at the § 341 meetings.  Although Smith testified that the Debtor can be paid to recycle tires, minimizing the upfront costs, the Debtor has not entered into any contracts for tire recycling.

10.  In addition, the Debtor disclosed that it does not own the second Kool Unit. According to Schedule B, the Debtor is a member of a joint venture, PC-ARM, LLC, which owns the second Kool Unit. Upon information and belief, Advanced Resources Materials, which is part of the PC-ARM joint venture, moved the second Kool Unit to South Carolina to perfect its possessory securityinterest.  Smith also testified that the South Carolina Kool Unit cannot be operated because it is not assembled. To date,operation of the Kool Units have not generated any cash for the estate.

 

Editors’ Notes for disambiguation:

The Wiscsonsin Dept. of Financial Institutions’ website – WDFI.org – lists the following:

  • PC-ARM LLC, for which the ‘Registered Agent’ is Ed M. Kolasinski and the address is 2077 Lawrence Dr., De Pere, WI 54155, which renamed itself PC-ARM LLC on January 16, 2016 after organizing under the name Eco Hub Wisconsin LLC on January 5, 2016. (Did you get that? Eco (space) Hub Wisconsin LLC, as opposed to Ecohub (no space) Wisconsin LLC, for which the ‘Registered Agent’ is Stephen A. Smith, and which was previoulsy named Green Box Wisconsin LLC, and Green Box NA Wisconsin OP LLC before that.)
  • GB-ARM LLC, which also lists 2077 Lawrence Dr., De Pere, WI 54155 as its address, and for which the ‘Registered Agent’ was changed to Green Box NA Green Bay LLC on June 30, 2016,

Related:

Note that the addresses for both Crossgate Partners, LLC & Advanced Resource Materials, LLC, have the same street number but a different street name, and while there is a ‘7320 McGinnis Ferry Rd.’ in Suwanee, GA, there does not appear to be any ‘7320 Mathis Ferry Rd.’ anywhere in Suwanee, GA, or at all for that matter.

The September 3, 2014 UCC Filing Statement with WDFI lists the ‘Name of Contact’ as Atty. Roger Stanton of the lawfirm Cohen Norris Wolmer Ray Telepman Cohen based in North Palm Beach, FL.

The July 29, 2015 UCC Filing Statement with WDFI lists the ‘Name of Contact’ as Ty Willihnganz of Ty Will Law, LLC, who is currently under ‘Disciplinary Review’ by the Wisconsin State Bar’s Office of Lawyer Regulation, and who – along with other former employees of Ron Van Den Heuvel – is still trying to get seized property back from the Brown Co. Sheriff’s Dept.

Note that the July 29, 2015 UCC Filing falls after the date that Green Box NA Green Bay, LLC, was put into Receivership by the Brown Co. Court in June of 2015.

Did Ty Willihnganz help Ron Van Den Heuvel & Green Box NA Green Bay, LLC, file false documents with WDFI regarding the illegal out-of-state transfer of property under the control of Receiver Michael S. Polsky, Esq., after the Receivership had been established to a pre-Receivership creditor who should have been involved in the Receivership?

Oh, and lookee here…

NEW!  8/30/2016 COURT FILING:

 

Back to the August 26, 2016 U.S. Trustee’s Motion to Dismiss or Convert Case to Chapter , U. S. Bankruptcy Court, Wisconsin Eastern District Docket No. 16-24179-beh, Chapter 11, Green Box NA Green Bay, LLC:

11.  The Debtor’s ability to operate the Kool Units is further complicated by the fact that it does not own the technology necessary to operate them. According to Schedule B, “Debtor appears to have the non-exclusive rights to use certain patents owned by Ron Van Den Heuvel or a controlled entity but has been advised that the IP license fee was never paid nor for that matter liquidated.  Debtor is negotiating this isuuse [sic]. IP is essential to the operation of the business.”  Docket Entry #14, Schedule B, Question 60 (emphasis added).

12.  Another problem in this case concerns the Debtor’s Schedules and Statement of Financial Affairs, which are not complete or accurate.  Van Den Heuel did not participate in the preparation of the Schedules and Statement of Financial Affairs.  In preparing the Debtor’s Schedules, Smith relied on an inventory prepared by Van Den Heuvel in 2015.  This inventory is not accurate, identifying Eco-Hub as the owner of the Kool Units.  Other omissions include information readily available on CCAP, obtainable from a UCC search, a wall-to-wall inventory or by contacting the appropriate government agency.

13.  The Debtor’s tax situation is also complicated.  The Debtor has not filed any tax returns.  Tax liability is critical information for creditors and the Court.

14.  Upon information and belief, the Debtor sponsored an ERISA retirement plan.  The Schedules and Statement of Financial Affairs do not contain any information about the ERISA plan or provide notice to employees who might have claims based on the Debtor’s failure to remit funds to the ERISA plan.

15.  Schedule F is not complete.  Two unscheduled creditors, Ferrellgas, Inc. and Evoqua Water Technologies, LLC, filed proofs of claims.  See Claims Register, Claims #1 and #4.

Law and Argument

16.  The Bankruptcy Code provides that “on request of a party-in-interest, and after notice and a hearing, the court shall convert a case under this chapter to a case under chapter 7 or dismiss a case under this chapter, whichever is in the best interest of creditors and the estate, for cause ….” 11 U.S.C. § 1112(b)(1).

17.  Examples of “cause” to convert or dismiss are provided by statute. 11 U.S. C. § 1112(b)(4).  Although this list is different from the pre-BAPCPA list, the fact that the list is illustrative and not exhaustive has not changed. In re Attack Props., LLC, 478 B.R. 337, 344 (N. D. Ill. 2012).

18.  Once the movant establishes cause, in the absence of special circumstances, the bankruptcy court must dismiss or convert the chapter 11 case. 11 U.S.C. § 1112(b)(1). In re TCR of Denver, 338 B.R. 494, 498 (Bankr. D. Colo. 2006).  As set forth below, many grounds exist to establish cause for dismissal of this case.

Cause for Dismissal: Misuse of Estate Assets for the Benefit of Eco-Hub
11 U.S.C. § 1112(b)(1) Cause for Dismissal

19.  The Debtor is a fiduciary to the estate and to creditors.  The bankruptcy system relies on managing employees to carry out the fiduciary responsibilities of a trustee.  Commodity Futures Trading Comm’n v. Weintraub, 471 U.S. 343, 355 (1985) (citing Wolf v. Weinstein, 372 U.S. 633, 649-52 (1963)).

20.  The hallmark of a trustee is accountability and segregation of funds.  In re Nugelt, 142 B.R. 661, 666 (Bankr. D. Del. 1992).  The premise that insiders may simply take what they need or want of the estate’s assets is contrary to the Bankruptcy Code and the fiduciary duty owed the estate and its creditors. Nugelt at 666.

21.  In the instant matter, by failing to collect rent from Eco-Hub, management diverts funds from the Debtor to Eco-Hub, breaching its fiduciary duty to the estate.  Eco-Hub leased the Debtor’s facility for $74,000 per month, while that lease expired, management should not allow Eco-Hub to use its facility rent free.  The failure to collect rent from Eco-Hub amounts to a breach of fiduciary duty to the estate.  Moreover, management’s failure to collect current rent from Eco-Hub amounts to a breach of fiduciary duty to maximize estate assets.  In re Fall, 405B.R.863, 869 (Bankr N.D. Ohio 2009).

22.  Management’s diversion of rent from the estate is cause for dismissal of this case.  See In re Fall at 869-870; 11 U.S.C. § 1112(b).

Cause for Dismissal: The Debtor Cannot Propose
a Confirmable Plan
11 U.S.C. § 1112(b)

23.  Even after the 2005 BAPCPA amendments to the Bankruptcy Code, bankruptcy courts continue to hold that cause to convert or dismiss a case includes failure to propose a confirmable plan.  “The very purpose of § 1112(b) is to cut short this plan and confirmation process where it is pointless.”  In re Local Union 722 Int’l. Bhd. of Teamsters, 414 B.R. 443, 446 (Bankr. N.D. Ill. 2009) (citing Matter of Woodbrook Associates, 19 F. 3d 312,  316 (7th Cir. 1994));  In re DCNC North Carolina I, LLC, 407 B.R. 651, 665 (Bankr. E.D. Pa. 2009) (“Fundamental bankruptcy policy continues to support the proposition that the inability to propose a feasible reorganization or liquidation plan provides “cause” for dismissal or conversion of a chapter 11 case on request of an interested party …. [T]he inability … to effectuate a plan, by itself, provides cause for dismissal or conversion of a chapter 11 case.”).  See also, In re SHAP, 457 B.R. 625, 628 (Bankr. E.D. Mich. 2011).

24.  In order to confirm a plan, the Debtor must be able to fund it.  Income projections must not be speculative. In re Cherry, 84 B.R. 134, 139 (Bankr.N.D. Ill. 1988).

25.  In May 2016, the Debtor reported that it had no cash, no cash flow, and a -$17,153 net operating loss.  See Docket Entry #40.  Similarly, in June 2016, the Debtor reported that it had no cash, no cash flow, $34,306 in accounts payable, $18,903 in accrued attorney’s fees and a net loss of -$36,056.  See Docket Entry #51.  The Debtor’s downward trend continued in July, 2016.  In July 2016, the Debtor reported that it received $450 from its parent company EARTH [recently renamed  Reclamation Technology Systems, LLC / RTS], which funded the opening of its bank accounts, accrued $41,212 in accounts payable and a net operating loss of -$7,234.  The Debtor failed to account for Eco-Hub’s unpaid rent in all of its MORS.  As time passes, the Debtor’s accounts payable and receivable increase. There is no evidence this trend will change.

26.  Smith testified at the § 341 meeting that Eco-Hub still does not pay rent to the Debtor because its cash flow is insufficient to pay the rent.  Smith has not provided any information indicating when that Eco-Hub will generate sufficient cash flow to pay rent.

27.  The Debtor claims that the Kool Units are ready to generate cash flow and that used tires for recycling in the Kool Units can be obtained at no cost.  Despite this opportunity to generate cash, since the commencement of this case, the Debtor has yet to recycle any tires on a commercial basis or sell any carbon black.  In addition, the second Kool Unit is in South Carolina, is not assembled and subject to a $200,000 possessory security interest of Advanced Resources Materials.  In addition, the Debtor cannot operate the Kool Units until it obtains a license to use the necessary technology.  The Debtor’s ability to generate cash from recycling tires in the Kool Units remains speculative.

28.  Smith argues that the Kool Units’ unique process will generate cash from third-party investors.  However, until investors deposit cash into the Debtor’s bank account, the interest of third-party investors also remains speculative.  Anticipation of investment cannot fund a chapter 11 plan.

29.  The Debtor’s total lack of cash, combined with failure to generate any cash from its paper conversion facility or from operating the Kool Units, demonstrates that the Debtor cannot fund a plan, which constitutes cause for dismissal of this case. 11 U.S.C. § 1112 (b)(1)(M).

Cause for Dismissal: Continuing Loss or Diminution of the Estate and Absence of a Reasonable Likelihood of Reorganization
11 U.S.C. § 1112(b)(1)(A)

30.  Continuing or substantial loss to the estate and the absence of a reasonable likelihood of reorganization is grounds for dismissal or conversion of a chapter 11 case.  11 U.S.C. § 1112(b)(4)(A).

31.  Cause for dismissal under this section of the United States Bankruptcy Code requires the movant to prove two elements – (1) continuing or substantial loss to the estate;  and (2) the absence of a reasonable likelihood of reorganization.  In re Creekside Senior Living Apartment, LP, 489 B.R. 51, 61 (6th Cir. BAP 2013).

32.  Continuing loss or diminution of the estate can be proven in this case in several ways: (1) by negative cash flow:  In re Loop Corp.v.U.S.Trustee (In re Loop Corp.), 379F.3d511, 515 (8th Cir. 2004), cert. denied, Loop Corp. v. United States Tr., 543 U.S. 1055 (2005);  (2) failure to collect post-petition rent: In re CCN Realty Corp., 23 B.R. 261, 264 (Bankr. S.D. N.Y. 1982);  and (3) reliance on a non-debtor to pay ordinary business expenses: In re Hassen Imps. P’ship v. City ofW. Convina (In re Hassen Imps. P’ship), 2013 Bankr. LEXIS 3870 at *40 (9th Cir. BAP 2013) (inability to pay obligations without outside money establishes loss to the estate.)

33.  In the instant matter, the movant can establish substantial and continuing operating losses to the estate by all three methods discussed above, meeting the first prong of 11 U.S.C. § 1112(b)(4)(A).  In its monthly operating reports (MORs), the Debtor reported accrued net operating losses: May 2016, -$17,153 and June 2016, -$36,056 and July 2016. -$6,793.  See Docket Entries #41, #51 and 57.  Next, the Debtor did not report collecting any post-petition rent in May or June of this year nor did it take any action to collect the more than $1 million in back rent.  See Docket Entries #40, #51 and #57.  Finally, the Debtor relies on other entities to pay its operating expenses. EARTH [recently renamed Reclamation Technology Systems, LLC / RTS], which owns 79% of the Debtor, used $450 to fund the initial deposits opening the Debtor’s bank accounts.  See Docket Entry # 57, page 4.  Eco-Hub paid the Debtor’s counsel’s retainer, and other entities pay its utilities, insurance, maintenance and repairs.  See Docket Entry #4.

34.  The second element of 11 U.S.C. §1112(b)(4)(A), the absence of a reasonable likelihood of rehabilitation, can be demonstrated when the debtor (1) does not have unencumbered assets to serve as assets for refinancing: Paccar Financial Corp. v. Pappas, 17B.R.662, 666 (Bankr.D. Mass. 1982);  (2) has no operating income: CCN Realty Corp at 262;  and (3) is unable to service its debt at the outset of the case and remains unable to do so for the foreseeable future: In re Fall, 405B.R. 863, 869 (Bankr. N.D. Ohio 2009).

35.  Like the first prong of 11 U.S.C. §1112(b)(4)(A), the evidence demonstrates the absence of a reasonable likelihood of the Debtor’s rehabilitation.  Rehabilitation signifies more than reorganization; “rehabilitation means to put back in good condition, reestablish on a firm-sound basis.” Loop Corp. at 108; In re Fall at 868.  As one court stated, “[T]his is not a technical [test] to see if the debtor can confirm a plan, but rather, whether the debtor’s business prospects justify continuance of the reorganization effort.”  In re Original IFPC Solutions, Inc., 317B.R.738, 742 (Bankr. N.D. Ill. 2004).

36.  The Debtor does not have any unencumbered assets to provide collateral for new financing.  See Docket Entry #14.  When Smith obtained his General Business Security Agreement and filed his UCC-1 in the fall of 2015, while the Debtor was in receivership, Smith perfected a lien on all the Debtor’s assets, leaving the Debtor without collateral for a new lender.

37.  To date, the Debtor has not reported any operating cash flow.  Without rent revenue, the Debtor does not have cash to pay its ordinary business expenses including taxes, utilities, insurance, repairs and maintenance or its administrative expenses.  See Docket Entries #40, #51, and #57, May, June and July, 2016 MORs.

38.  For years, the Debtor survived by obtaining cash from new investors, including Smith. The Debtor received $800,000 from Araujo in April 2011; $1 million from the Wisconsin Economic Development Corp in October 2011; $3.2 million from Clifton Equities in October 2012; $9 million from Ability Insurance in December 2013; and $4.7 million from Smith’s company, GlenArbor, during 2014-2016.  See Docket Entry #14.

39.  Despite these [$18.7 Million in] cash infusions, the Debtor failed to pay more than $300,000 in property taxes, accrued payroll taxes, never filed a Federal tax return, and owes more than $68,000 for employee health insurance premiums, among other debts.  See Docket Entry #14, Schedules E/F.

40.  In order to proceed in chapter 11, “courts require the Debtor to do more than manifest unsubstantiated hopes.”  In re Canal Place Ltd. Partnership, 921F.2d569, 577 (5th Cir. 1991);  See also Tennessee Publishing Co. v. American Nat’l Bank, 299 U.S. 18, 22 (1936).

41.  In this case, the Debtor offers little hope of rehabilitation.  Although the Debtor now argues that its Kool Units establish firm footing for its financial future, no concrete information about refinancing or outside investment has been presented to the court.

42.  The Debtor’s financial circumstances changed little, if any, since the filing of its petition. Accordingly, the Debtor does not have a reasonable likelihood of rehabilitation.

43.  Therefore, there is cause for dismissal of this case pursuant to 11 U.S.C. § 1112(b)(4)(B).

Cause for Dismissal: The Debtor Failed to Comply With its Statutory Duties to Complete Schedules and Statement of Financial Affairs
11 U.S.C. § 1112(b)(4)(F)

44.  Unexcused failure to satisfy timely any filing or reporting requirement established by the Bankruptcy Code is grounds for conversion or dismissal.  11 U.S.C. § 1112(b)(4)(F).

45.  The Bankruptcy Code requires the Debtor to file a complete and thorough disclosure of the Debtor’s assets, liabilities, and financial affairs within 14 days of the filing of the petition.  11 U.S.C. § 521(a), Fed. R. Bankr. P. 1007(c).  See In re Justice, 2002 Bankr. LEXIS 1857 at *12 (Bankr. D. S.C. 2002).

46.  The person preparing these documents must do so with reasonable diligence.  In re Gaulden, 522 B.R. 580, 589 (Bankr. W.D. Mich. 2014) (“A debtor must answer all questions contained in the schedules and other disclosure documents accurately so that creditors have a complete understanding of a debtor’s financial condition.”  See also Lewis v. Summers (In re Summers), 320B.R.630, 642-44 (Bankr. E.D. Mich. 2005).  In this case, the Debtor has not used reasonable diligence in preparing its Schedules and SOFA.

47.  Three months after commencement of the case, the Debtor’s Schedules and SOFA remain incomplete. Smith’s assertion that he has no information about the Debtor’s financial performance in 2014, 2015 and 2016 is disingenuous; during those years he invested $4 million in the Debtor.  During his testimony at the hearing on cash collateral, Smith stated that he performed his “due diligence” before he invested in the Debtor.  Presumably, during his due diligence process, Smith received and reviewed documents related to the Debtor’s finances, assets and liabilities.  Smith needs to use his own resources to compile information for the Debtor’s Schedules and Statement of Financial Affairs.

48.  During the § 341 meeting, Smith asserted that only Van Den Heuvel would have all the information pertaining to the Debtor’s assets, liabilities, and financial affairs but failed to explain why he did not obtain accurate and complete information from Van Den Heuvel prior to filing the Schedules and SOFA.  Pre-petition Smith applied sufficient power to oust Van Den Heuvel from the Debtor’s management.  Smith also possessed the ability to obtain the necessary information to complete the Schedules and Statement of Financial Affairs.

49.  The Debtor’s response to SOFA Question #4 is insufficient.  Question #4 requests information about any payment or transfer of property within a year of filing that benefited an insider.  The vague response indicates that Van Den Heuvel received “various payments of rent from subtenants” in an “unknown” amount and was used to “pay labor, insurance, and material.”

50.  Over three months into this bankruptcy the following information remains unclear: bank accounts used by Debtor in 2014, 2015, 2016;  whether the Debtor has any liabilities arising from any retirement plan;  the validity of claims made by Ferrellgas, Inc. and Evoqua Water;  how much rent was collected by Van Den Heuvel from subtenants, where that money was deposited, and what “labor, insurance, and material” bills were paid;  whether Van Den Heuvel transferred the Debtor’s assets to related non-debtor businesses;  and whether the Debtor has a claim against Van Den Heuvel personally or against another Van Den Heuvel business.  As a result, creditors’ picture of the Debtor’s pre-petition financial information remains incomplete.

51.  On SOFA Question #7, “legal actions within one year prior to filing,” Smith failed to list all the actions reported on CCAP.

52.  Upon information and belief, the Debtor sponsored a retirement plan.  The Schedules and SOFA do not contain any information about the Debtor’s employees’ retirement plan. The Debtor’s former employees do not have notice to pursue their claims.

53.  Accordingly, there is cause for dismissal because the Debtor’s Schedules and Statement of Financial Affairs are incomplete.  11 U.S.C. §1112(b)(4)(F).

Other Cause for Dismissal 11 U.S.C. § 1112(b)(1)

54.  Finally, administrative insolvency is cause for dismissal.  In re Hassen Imports Partnership, 2013 Bankr. LEXIS (BAP 9th Cir. 2013).

55.  According to the Debtor’s MORs, this estate is administratively insolvent. The Debtor has no cash flow to pay any administrative expenses, including attorney’s fees and post-petition expenses. See Docket Entries #40 and #51.

56.  The estate’s administrative insolvency is cause for dismissal of this case.  11 U.S.C. § 1112(b)(1).

57.  Another hurdle presented is the Debtor’s failure to file tax returns since its inception in 2011.  A confirmable plan must provide for payment of delinquent taxes within 60 months of the date of the filing of the petition. 11 U.S.C. § 1129(a)(9)(C).  Although more than three months have elapsed since the filing of this bankruptcy, the Debtor has yet to retain an accountant to prepare its delinquent tax returns.  The critical tax issue remains at a standstill.

Conclusion

58.  This case should not proceed because it is a half-hearted effort by management to buy time, which is particularly demonstrated by the incomplete Schedules and Statement of Financial Affairs.  The Debtor’s management’s failure to collect its only source of revenue – rent – from a related, non-debtor entity, Eco-Hub, demonstrates management’s disinterest in the estate.  Without complete Schedules and Statement of Financial Affairs, the Debtor cannot file an adequate disclosure statement or confirm a plan.  This case should be dismissed and the Debtor left to deal with its creditors outside of the bankruptcy forum.

59.  The foregoing issues constitute cause for dismissal of this case.  11 U.S.C. § 1112(b)(1), (b)(4)(A) and (b)(4)(F).

WHEREFORE, the United States Trustee requests that the Court dismiss this case.  The United States Trustee does not intend to file a brief in connection with this pleading, but reserves the right to file a responsive brief or pleading, if necessary.

Dated: August 26, 2016.

PATRICK S. LAYNG
United States Trustee

AMY J. GINSBERG
Attorney for the United States Trustee

Case 16-24179-beh, Doc 59
Filed 08/26/16

 

Related recent documents from U. S. Bankruptcy Court, Wisconsin Eastern District Docket No. 16-24179-beh, Chapter 11, Green Box NA Green Bay, LLC:

 

From U.S. District Court, Eastern District of Wisconsin Criminal Case No. 16-CR-64, U.S.A. v. Ronald H. Van Den Heuvel, Paul J. Piikkila, and Kelly Yessman Van Den Heuvel regarding BANK FRAUD

From Page 2 of the above document:

The United States provided defendants with a disc containing the core discovery related to the indicted bank fraud in May 2016 at the time of the arraignment. The United States also provided an index describing the materials. The disc contained approximately 16,000 pages. About 9,000 of those pages are bank records and deposit or withdrawal items from banks other than Horicon Bank where Van Den Heuvel, his companies, or witnesses had accounts.

From Pages 4-5 of the above document:

By way of background, in July 2015, the Brown County Sheriff’s Office executed search warrants on Ronald Van Den Heuvel’s business locations and residence. The supporting affidavits established probable cause to believe that Ronald Van Den Heuvel was committing securities fraud and theft in violation of state law. The affidavits described how Mr. Van Den Heuvel fraudulently represented his waste reclamation businesses, including Green Box NA Green Bay, LLC (“Green Box”), to induce loans and investments that he used for other purposes, including personal expenses. The search warrants authorized the seizure of records and electronic devices related to those offenses.

In executing the search warrants, the Brown County Sheriff’s Office seized a substantial volume of material, both hard copy files and electronic devices. The nature and the complexity of the alleged theft and securities fraud violations, as well as the volume of material involved, required substantial resources and time to review the seized material.

The Brown County Sheriff’s Office has given federal law enforcement agents access to the seized material as there is a parallel federal investigation into the theft and securities fraud alleged in search warrant affidavits.

COURT: Due to the volume of discovery materials, volume and potential complexity given these are financial records requires certain expertise and understanding, and the organizing and synthesizing of the materials, court finds this matter designated complex.

 

The terms “Byzantine,” “devious,” “surreptitious,” “intricate,” “labyrinthine,” and “complex” do not even begin to describe the expansive fraud schemes of Ronald Henry Van Den Heuvel and his wife, Kelly Yessman Van Den Heuvel, and their various ‘business’ partners and corporate fronts, about which the January 29, 2016 WI State’s Reply to Defendant’s Motion for Return of Property, Brown Co. Case No. 2015CV1614, In the Matter of the Return of Property to Ronald Van Den Heuvel, states:

[C]ases involving complex schemes to defraud, “may require piecing together, like a jigsaw puzzle, a number of bits of evidence which if taken alone might show comparatively little.” …

The State’s affidavits supporting the search warrant applications clearly demonstrate that Mr. Van Den Heuvel, through his forty-four business entities, was engaged in a pervasive scheme to defraud investors and lenders, contrary to Wis. Stat. 943.20(1)(d) and Chapter 551 of Wisconsin Statutes. 

 

ON A RELATED NOTE,

During the August 10, 2016 General Tribal Council Special Meeting, GTC foolishly voted to support the following two (2) Motions in defense of Ron Van Den Heuvel’s and Tribally-owned Oneida Seven Generations Corporation’s affiliated fraud schemes, actually voting to keep itself in the dark about exactly who has been funding, aiding & abetting those fruad schemes that have resulted in untold TENS OF MILLIONS OF DOLLARS IN LOSSES by the Oneida Nation of Wisconsin’s GTC.

As seen in the August 10, 2016 GTC Special Meeting Action Report Draft. GTC voted to support:

Amendment to the main motion by Dan Hawk to allow Oneida Seven Generations Corporation to continue litigation with the City of Green Bay. Seconded by Sherrole Benton. Motion carried by show of hands.

…and…

Motion by Sherrole Benton to reject resolution titled Investigation in Oneida Seven Generations Corporation. Seconded by Donna Metoxen. Motion carried by hand count: 655 support; 347 opposed; 69 abstentions

…although some Oneida Nation of Wisconsin GTC Members said after the vote was taken that they were confused by the wording of the latter Motion as displayed on the monitors in the meeting hall.

The continuation of the August 10, 2016 GTC Special Meeting is scheduled to be held on October 2, 2016, and GTC will convene for the Fiscal Year 2017 GTC Tribal Budget Meeting on September 19, 2016.

Will GTC finally find out how many millions of GTC’s Tribal dollars the Oneida Business Committee allowed OSGC’s ‘Managing Agent’ Pete King III of King Solutions LLC to use to pay off a secret settlement agreement that looks more like an extortion shakedown scheme?

Not if GTC continues to keep its head in the sand, and continues to allow the Oneida Business Committee to waste tens of millions of dollars perpetratingdefending ECO-FRAUD rather than fighting it!

 

MEANWHILE, rather than getting & staying in bed with devious crooks and surreptitious scam & con artists, and instead of wasting tens of millions of their tribes’ own dollars destroying their own reputations by blindly & foolishly defending toxic waste incinerator fraud schemes like those of Ron Van Den Heuvel & OSGC and OSGC’s subsidiaries Green Bay Renewable Energy LLC & Oneida Energy Inc., which OSGC’s executives and OBC Chair Cristina Danforth wanted to try to profit from by MARKETING & SELLING DANGEROUS WASTE INCINERATOR FRAUD SCHEMES TO OTHER TRIBES

….members of other First Nations are actually protesting corporate polluters’ schemes:

 

Of course, you can always count on slimy habitual liars like OBC Member & OSGC Liaison and incinerator advocate Brandon Stevens to try to hypocritically capitalize on the situation in the media.

 

See also:

 

 


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