Milwaukee, WI Bankruptcy Law Blog

Tuesday, May 15, 2018

Even the Best Laid Plans Can Go Awry

Sometimes when you are going through a rough financial spot it can be helpful to be reminded that you are not alone. There are other people out there who have made mistakes, and plenty of people who have seen very carefully laid plans fail.

However, not a lot of people want to share stories of personal financial ruin - and who can blame them? - but the business world is full of examples of financial failure, bankruptcy, and redemption. Right now, we are following an interesting bankruptcy case up in Oshkosh that will likely have implications for the entire state.

The University of Wisconsin-Oshkosh Foundation has filed for Chapter 11 bankruptcy (which is sort of like the business version of a Chapter 13 bankruptcy). As Wisconsin Public Radio reports, “Normally, foundations are meant to be the fundraising arms of their campuses and providers of scholarships and financial assistance. But, the UW-Oshkosh Foundation got into red ink because of five development deals. They include: two bio-digesters that turn farm waste into energy; a hotel, which has proven financially solvent; an alumni welcome center; and a sports complex.”

Not all these investments are paying off, and the foundation is $14.5 million in debt. After the university itself and the UW System refused to chip in any cash to help the foundation out, and also decided to sue the former chancellor and vice-chancellor, it became clear that bankruptcy was the only option.

The craziest thing about the foundation’s epic fail is how much oversight there was, and how many presumably smart people signed off on all of the investments that have tanked. The foundation has a governing board that had to approve these plans. The UW System Board of Regents exercises some oversight over the various foundations run by system schools. And of course, there were leaders at UW-Oshkosh that were involved.

All this just goes to show you that even sure-fire financial plans can fail. You can have the best intentions, seek out the best advice, and still have things blow up in your face. Filing for bankruptcy can help get you back on your feet when there are no other options available.

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