Sheriff’s sales planned for SIST properties: Gas stations, apartment buildings to be sold

The Shawano Leader/August 24, 2011

A week after the R.C. Samanta Roy Institute of Science and Technology (SIST) and two of its subsidiaries agreed to the dismissal of their bankruptcy cases, foreclosure proceedings have been renewed against several of their Shawano properties.

A sheriff’s sale has been scheduled for three gas stations owned by SIST subsidiary Midwest Oil of Wisconsin LLC. The People’s Express stations at 1381 East Green Bay Street, 1206 East Green Bay Street and 716 South Main Street are due to be sold to the highest bidder as separate parcels at 9 a.m. October 13 at the Shawano County Courthouse.

Integrity First Bank of Wausau filed suit against Midwest Oil in September 2006, alleging default on $1.2 million in debt.

The gas stations were previously scheduled for a sheriff’s sale in March 2009, but the foreclosures were stalled by a bankruptcy petition in federal court in Delaware.

A sheriff’s sale also has been scheduled October 5 for two apartment buildings that SIST subsidiary Midwest Properties of Shawano LLC had been purchasing under a land contract from Robert and Shannon Broder. The property is already in receivership.

Midwest Properties entered into the land contract in 2004, according to court records, agreeing to purchase the apartment buildings for $575,000, with a down payment of $100,000. The remaining $475,000 was to be paid in monthly installments of $5,000 with a 6.25 percent annual interest rate.

Fox Communities Credit Union (FCCU) filed suit against the Broders in 2008, naming Midwest Properties as a defendant with a subordinate claim on the apartment properties. The credit union was subsequently granted a default judgment and its legal counsel, the Van Lieshout Law Office, was appointed as receiver.

Midwest Properties has maintained it paid the Broders $5,000 a month for three years under the assumption they were using the money to pay off the mortgage.

In February 2009, FCCU was granted foreclosure, allowing the sale of the apartment buildings, but that sale was also delayed when Midwest Properties filed for bankruptcy.

Under a court order agreed to last week by SIST and the U.S. Trustee’s Office, the Chapter 11 bankruptcy cases of SIST, Midwest Properties, and U.S. Acquisitions and Oil Inc. were dismissed with prejudice for one year.

The ruling means none of the three entities can file new Chapter 11 bankruptcy petitions in any bankruptcy court in the U.S. for one year, prohibits them from filing under a new corporate name and prevents a new filing by any corporate entity that might purchase their assets or liabilities.

SIST and six of its subsidiaries originally filed for Chapter 11 bankruptcy protection in Delaware in March 2009.

The original seven bankruptcy petitions were dismissed in September 2009 and were subsequently appealed to the U.S. Third Circuit Court of Appeals.

However, SIST and three of the subsidiaries – Midwest Properties, Midwest Oil of Minnesota LLC and U.S. Acquisitions and Oil Inc. – withdrew from the appeal, only to re-file the new bankruptcy petitions that were dismissed last week.

The subsidiaries remaining from the original March 2009 petition were Midwest Oil of Wisconsin, Midwest Oil of Shawano LLC and Midwest Hotels and Motels of Shawano LLC.

In June, a federal appeals court upheld the dismissal of their original Chapter 11 bankruptcy petitions.

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