Number
041411
Version
SUBSTITUTE 1
Reference
Sponsor
CHAIR
Title
Resolution approving and authorizing stipulation with Molecular Biology Resources, Inc. concerning in personam liability for 2002-2004 tax roll amounts against 6143 North 60th Street, Tax Key No. 155-0404-000-0, in the 9th Aldermanic District.
Analysis
Resolution approves and authorizes compromise of an in personam judgment expected to be granted to City in the amount of $671,954.85 for back taxes (2002-2004) and other charges against 6143 N. 60th Street in exchange for the lesser amount of $200,000 paid over 24 months plus an up-front payment of $29,858.26.
Body
Whereas, 6143 N. 60th Street (the "Property") is owned by Molecular Biology Resources, Inc. ("MB"), and is on the City's do-not-acquire list as it is suspected of being a brownfield and environmentally contaminated; and
Whereas, according to City's outside collection attorney, the Kohn Law Firm ("Kohn"), (1) Kohn initiated collection activities against MB, and Kohn was able to collect $220,000 (all of the 2001 tax balance against the Property and part of the 2002 tax balance), and (2) when MB stopped making payments to Kohn, alleging an error in billing for City local sewer charges (the "LSC") and MMSD sewer charges, Kohn sued MB for the 2002 tax balance, Circuit Court Case No. 04-CV-002351 (the "Lawsuit"); and
Whereas, after discussions between the City Attorney's Office and Kohn regarding MB's allegations of billing errors for City LSC's and MMSD sewer charges, the City Attorney's Office substituted itself for Kohn as the City's lawyer to pursue the 2002 delinquencies in the Lawsuit; and
Whereas, the City amended the City's Complaint in the Lawsuit to also include the 2003 taxes that had subsequently become delinquent; and
Whereas, 2004 taxes have since been billed and are now also delinquent; and
Whereas, various discussions have taken place between MB (through the lawyers that MB hired for the Lawsuit, Reinhart, Boerner, and the lawyers that MB hired to explore a possible MB bankruptcy or debtor-protection filing, von Briesen & Roper); and
Whereas, as a result of those discussions, MB and the City Attorney's Office negotiated the proposed Settlement Stipulation and Order that is part of this file (the "Stipulation"); and
Whereas, pursuant to the Stipulation and this resolution, judgment would be entered in the Lawsuit in favor of the City and against MB for the entire amount of the outstanding 2002, 2003, and 2004 tax balances (including real-property taxes, special assessments, and special charges for delinquent water, delinquent LSC's and delinquent MMSD sewer charges) plus delinquent and/or outstanding sewer and water charges (i.e. February, 2005 total payout of $671,954.85), but the judgment would be conditionally satisfied for a lesser payment of $29,858.26 (the up-front payment to cover delinquent and/or outstanding sewer and water charges not yet on the tax rolls) plus $200,000 paid over 24 months; and
Whereas, MEDC has a second mortgage interest in the Property, behind a first-mortgage held by Park Bank; and
Whereas, MEDC has discussed with MB its financial situation, and MB hired a financial consultant; and
Whereas, MB has asserted that there is a risk that, if the City does not approve the Stipulation, MB may file bankruptcy and/or MB may cease operations at the Property (thereby jeopardizing jobs it provides to its employees), and/or that the City may otherwise have difficulty collecting personally from MB;
Be It Resolved That, City hereby approves and authorizes the Stipulation, City execution and entry into it, and the compromise of the City's $671,954.85 judgment for the lesser amounts as called for in the Stipulation and in this resolution; and
Be It Further Resolved That, when MB transmits the monthly installments called for under the Stipulation, that the same be deposited into the delinquent tax fund per Milwaukee Code of Ordinances ยง304-30; and
Be It Further Resolved That, the Comptroller and Treasurer are authorized to take such actions as are appropriate to eliminate the 2002-2004 property-tax-receivable balance from the Treasurer's records and the corresponding receivable balance for those delinquencies in the delinquent-tax fund.
Requestor
City Attorney
Drafter
City Attorney
Gregg C. Hagopian
2/9/05
1060-2004-1487:90048