Free Seminar – Doing Business in China

Bakke Norman is hosting a free seminar at the New Richmond Campus of WITC on Thursday, August 4, 2011. Registration begins at 7:30 a.m. and the seminar runs from 8 a.m. to 10 a.m. A panel of guest speakers will share their insights and experiences on doing business in China, including:

  • Finding a reliable business partner in China
  • Navigating government agencies and regulations
  • Currency and other international finance issues
  • Emerging trends in China, such as the narrowing wage gap

Seminar attendees also will have the opportunity to ask questions.

RSVP to newsletter@bakkenorman.com through August 3rd. Last minute seating also available at the event.

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Bankruptcy: A Primer for Municipal Clerks

Municipal Law Alert, July 2011

With economic malaise continuing to grip the country, bankruptcy filings continue at record levels. Our firm continues to field numerous calls from municipal clerks wondering what to do when they receive the dreaded notice that someone who owes the municipality money has filed for bankruptcy protection. This article briefly describes the bankruptcy process and discusses some items clerks should consider when they receive notice of a bankruptcy filing.

  • What is Bankruptcy?

Bankruptcy is a specialized area of law, which is subject to complex rules and jargon that most find confusing. The Bankruptcy Code (the “Code”) creates uniform bankruptcy procedures for the entire country. Bankruptcy is a form of legal relief granted to people (called “debtors”) in appropriate cases by federal bankruptcy courts.Wisconsin has two bankruptcy courts: (1) the United States Bankruptcy Court for the Eastern District of Wisconsin; and (2) the United States Bankruptcy Court for the Western District of Wisconsin. In most cases, bankruptcy filings affecting debtors in Northwestern Wisconsin will be filed in the Western District of Wisconsin’s Eau Claire division. When the case is filed, all collection efforts against the debtor must stop or “stay”. This halting of collection is legally referred to as “the automatic stay,” which is discussed in some detail below. At the end of the case, in most instances, a debtor is granted a discharge, which prohibits existing creditors from making any attempt to collect from the discharged debtor. The goal is to give the filing debtor a “fresh start” from debts.

  • Who can File Bankruptcy?

Every person and legal entity has the ability to file for bankruptcy protection. Most individuals file for bankruptcy under either Chapter 7 or Chapter 13 of the Code. Most corporations and other legal entities file under Chapter 11 of the Code. Farmers can file under Chapter 12 of the Code. Under the Code (a federal law), municipalities can file for bankruptcy under Chapter 9 of the Code. However, in Wisconsin (under state law), local governments may not file for bankruptcy protection because they have never been granted bankruptcy authorization.

Chapter 7: Chapter 7 is often called the liquidation chapter because it provides for the sale of all of the debtor’s non-exempt assets in order to pay debts. However, the term “liquidation chapter” is often a misnomer because in most cases all of the debtor’s assets are exempt from sale. The Code and Wisconsin law provide these exemptions, and they include items like the homestead, vehicles, retirement accounts, and household furnishings. Each applicable exemption has a dollar limit. If the asset is worth more than the limit, the asset could be sold and the non-exempt portion could be used to pay creditors. However, that rarely happens, as most debtors are able to find an exemption for most of their assets. Higher wage earners are generally not able to file a Chapter 7 and must instead file a Chapter 13.

One issue for municipalities to be aware of in a Chapter 7 is the concept of reaffirmation of secured debts. If your municipality has loaned money to a debtor under a program to purchase or refurbish property and holds a mortgage as collateral, the debtor may desire to enter into a reaffirmation agreement with the municipality in order to keep the property. When a reaffirmation agreement is entered into, it simply means that particular debt is not discharged. For more information regarding Chapter 7, visit the U.S. Courts website by clicking here.

Chapter 13: Chapter 13 is the consumer bankruptcy alternative to Chapter 7. Instead of selling non-exempt assets, the debtor becomes subject to a payment plan. The payment plan requires the debtor to pay some or all of the debtor’s debts over the course of a 3-5 year period. If the plan is successfully completed (in other words, if the debtor makes all the payments required under the plan), the remainder of the debtor’s debts are discharged. The payment amount depends on the debtor’s disposable income. For more information regarding Chapter 13, visit the U.S. Courts website by clicking here.

Chapter 11: Chapter 11 is generally used by businesses to reorganize their debts and pay a portion of them over a plan period. It is similar (though much more complicated) to a Chapter 13. For more information regarding Chapter 11, visit the U.S. Courts website by clicking here.

Chapter 12: Chapter 12 is designed specifically for family farmers. It provides for the restructuring and payment of farm debts over the course of a plan period. For more information regarding Chapter 12, visit the U.S. Courts website by clicking here.

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Recent Polk County Case Highlights Need for Proper Agendas

Municipal Law Alert, July 2011

In Polk County, two members of a three-person town board were prosecuted by the district attorney for violations of the open meetings law. The charges stemmed from the passing of an ATV ordinance. According to news reports, the agenda item stated, “ATV Use on Town Roads.” The topic generated controversy in the form of various town residents with distinctly opposing points of view. At the meeting, the board reviewed and passed an ordinance that had been prepared in advance by the town clerk, using other town ATV ordinances as models.

One of the local residents asked the Sherriff’s Department to investigate possible violations of the open meetings law. Two of the board members were charged with violations, and court proceedings ensued. One of the board members apparently negotiated a plea and paid a fine of $114.50. The other pled not guilty and, at trial, the court dismissed the case, finding that any violation that may have occurred was unintentional.

Regardless of the merits of the case discussed above, the incident raises two very important reminders about the open meetings law:

  • Local government officials can be personally liable for discussing and taking action on items not on the agenda, or not sufficiently described on the agenda.
  • The better the agenda item describes what will happen at the meeting, the less chance you and your city, village or town may be subject to attack for violating the open meetings law.

One of the main goals of the agenda requirements in the open meetings law is to make sure the public knows what will be discussed and what action their local government might take. The statute that sets forth this requirement does not create a black and white dividing line for how agenda items must be written. It merely says that the agenda must reasonably “apprise members of the public and the news media” of the subject matter of the meeting.

You don’t want to write a book about each agenda item. On the other hand, there are still some municipalities with agenda items that state something along the lines of “such matters as will come before the board.” Although a board member might argue that she’s done it that way for fifty years so it’s good enough, that kind of agenda item could get the board in hot water the next time a savvy local resident doesn’t like something the board does.

In the end, the ATV ordinance was enacted several meetings later. If the original agenda item had just said, “Discussion and possible action on Town ATV ordinance,” the town and the town board members would likely have been spared a lot of hassle and expense.

For further information on how best to write agenda items, see the article by Attorney Gary Bakke in the May 2010 edition of the Municipal Law Alert, which can viewed by clicking here.

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Don’t Forget to Adopt a Grievance Procedure

Municipal Law Alert, July 2011

Now that Act 10 (the Budget Repair Bill) has taken effect, municipalities without a civil service system (most of you) are required to establish a grievance system that addresses employee terminations, employee discipline, and workplace safety no later than October 1, 2011. Any grievance procedure a municipality creates must contain: (1) a written document specifying the process that a grievant and an employer must follow; (2) a hearing before an impartial hearing officer; and (3) an appeal process in which the highest level of appeal is the governing body. It should also be noted that even if you have a union contract that has not expired, you are still required to comply with the law by adopting a grievance procedure even though that procedure likely will not apply to those covered by the union contract until the existing contract expires.

There are a number of methods that comply with the law. The grievance procedure can be short, it can be long, it can be complex or it can be relatively simple. There are a number of thoughts and theories floating around about what ought to be done, but at this point, they are just that–thoughts and theories. No one really knows how the grievance procedures will work in practice or how the courts will view them. What we do know, however, is that this should not be a one-size-fits-all document. A grievance procedure for a large city or school district obviously will be different than a grievance procedure for a town with one employee. Because of the various considerations associated with adopting a grievance procedure, it is recommended that you work with your municipal attorney to develop a procedure that will work for your particular circumstance.

Ed. Note: The League of Wisconsin Municipalities has posted some sample grievance procedures on its website, which can be viewed by clicking here.

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Wisconsin Act 10 Grievance Procedure

As an update to the post below, we are now past the October 1st deadline. Nevertheless, any municipalities which have not yet adopted a grievance procedure which meets the requirements of 66.509 should still do so as soon as possible. Since I made the last posting about this, the Towns Association has added sample grievance procedures and some other background information. See: www.wisctowns.com.

Wisconsin Act 10 requires municipalities to have a grievance procedure. Section 66.0509, Wis. Stats. I wanted to bring to your attention that the Wisconsin League of Municipalities has posted two sample grievance procedures drafted by Attorney Nancey Pirkey. While they look good as generic samples, I would suggest you have your municipal attorney review any procedure your municipality proposes to adopt to make sure they make sense in your municipality, and to make sure your final version complies with 66.0509.

Employment Law Client Guide for Employers

Employment Law Attorneys: Who Are They? What Do They Do? How Much Will They Charge?

Bakke Norman, S.C. has experienced attorneys with expertise in employment law matters. We employ skilled legal assistants and paralegals to help you and your attorney with your file and to assure you of the best professional representation. You are encouraged to contact the legal assistant or paralegal regarding any questions about your case if the attorney is unavailable. A legal assistant or paralegal is not an attorney and is not permitted to give legal advice. However, the legal assistant or paralegal can answer many questions regarding your case. The legal assistant or paralegal will refer questions calling for legal advice to your attorney.

What Will Your Attorney Do?

Your attorney will advise you about the law and help you prepare and present your case, which might involve hiring or consulting with other professionals such as private investigators, physicians, psychologists or vocational rehabilitation specialists.

We will keep you advised regarding the legal proceedings, advise you regarding your options and answer any questions you have.

What Does It Cost?

Employer clients of Bakke Norman, S.C. are charged for legal services based on the time spent on the file, the experience and expertise of the attorney working on the file, and the complexity of the problems presented and the result obtained. Time records are maintained for all work on the file, including telephone calls. These records are one element used to calculate your bill unless you have a different fee agreement with your attorney.

An employment matter’s cost is difficult to predict accurately. The total cost depends on the work required of us, the number of witnesses and documents, the complexity of the legal concerns involved, and our opponent’s attitude and behavior.

During our representation, we might advance certain fees and costs for our clients, which might include such items as filing fees, process servers’ fees, court reporter fees for depositions, witness subpoena fees, private investigator fees, expert witness fees, telephone charges, photocopies and travel expenses. You will always be billed for the costs we advance on your case, besides attorney fees.

We must have an agreement with you regarding fees and costs before any work starts. If, for any reason, you do not completely understand the fees to be paid, please discuss this with your attorney immediately.

Telephone Calls

We welcome your telephone calls and e-mail with questions about your case or with new information we need. When your attorney is in court or meeting with another client, your call might be referred to the legal assistant or paralegal assisting on your file. We will make every effort to respond to your inquiries promptly.

Settlement

At various stages of the proceedings, we might explore the possibility of settlement. We might do this by informal contact with the other attorney or by a formal settlement conference. Although we will start and participate in settlement discussions, you are the only one who can agree on a settlement. Settlement might not be possible or advisable until all facts and values have been uncovered through the discovery process. When we have all the facts, we will offer you our professional advice and recommendations for settlement based on the law and our view of the case.

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Conditional Use Can Become Nonconforming Use

In a recent appeals court ruling recommended for publication, Yassin Hussein and Germantown Auto Sales, LLC, v. Village of Germantown Board of Zoning Appeals, the court ruled that a municipality cannot enforce a conditional use permit issued prior to a zoning ordinance amendment which removed that use as a conditional use, and that the use continues as a legal nonconforming use.

Germantown Auto Sales had been issued a conditional use permit for an auto sales, repair and service station in 1973. In 1988 the Village of Germantown revised its zoning code, eliminating auto sales as a conditional use in the zoning district. In 2009, Germantown Auto Sales sought Village permission to increase the number of cars parked on the property beyond what the 1973 conditional use permit allowed. The Village denied the expansion, and demanded that Germantown Auto Sales come into compliance with its 1973 permit.

In a certiorari action, the circuit court ruled that Germantown Auto Sales had a legal nonconforming use, and must live within the bounds of legal nonconforming uses, but that the Village could not seek to enforce the conditional use permit from 1973. The appellate court affirmed the circuit court decision.

The result for Germantown Auto Sales is less than clear – Germantown Auto may continue its historical use as is, but expansion (which is what it was after) would be risky. As the court stated, quoting an earlier case, “if there is an identifiable change in the [legal nonconforming] use, the enlargement is illegal. If the expansion is a result of a mere increase in the historically allowed use, the enlargement or expansion will be allowed subject to regulatory markers.” Waukesha County v. Pewaukee Marina, Inc., 187 Wis. 2d 18, 27, 522 N.W.2d 536 (Ct. App. 1994). Thus an incremental expansion due to the natural ebb and flow of the historical business use would probably be safe. However any major change risks losing the nonconforming status altogether. It appears to me there’s a large grey area between the two.

Wisconsin Act 10 and Act 32

Things are finally starting to shake out with respect to the new laws. First of all, the Wisconsin Supreme Court overturned a lower court action that had put Act 10 on hold – allowing the Act to become law. However, Act 32, the Budget Bill, made a number of clarifications and changes to Act 10, so the new law, as amended, is starting to realize some practical effect. From a municipality’s standpoint, there was some good and some bad in Act 10 as modified by Act 32. The League has posted some great articles on this subject, the latest one titled “List of Good and Bad Changes in Act 32…” You should go to their link and review this and their FAQ document for details.