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Banking & Creditors' Rights SmartPractice |
Liebmann, Conway, Olejniczak & Jerry, S.C.
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Welcome to LCOJ's Banking & Creditors' Rights SmartPractice
We are excited to introduce the LCOJ Banking & Creditors' Rights SmartPractice, a complimentary email advisory to our clients and contacts in the banking and financial services industry. Banking SmartPractice is designed keep you up to date on laws, proposed legislation, articles published by our team and other information impacting the industry. | |
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Our Banking & Creditors' Rights Team
Services
Liebmann, Conway, Olejniczak & Jerry, S.C.'s Banking & Creditors' Rights Team counsels banks and other commercial lenders on a variety of financing transactions, including loan origination, loan work-out agreements, lender liability defenses, foreclosures and creditors' rights in bankruptcy. Not only has our team worked extensively with local and regional financial institutions, it also lends its experience to regional and national banks by serving as board members.
On the traditional lending side, we represent banks and other creditors in the structuring, negotiation, and documentation of loan transactions for commercial borrowers. Our team currently has two attorneys who have been specially designated by the U.S. Small Business Administration, allowing them to prepare expedited 504 loan closings. In addition to traditional lending work, our attorneys represent creditors in work-outs, debt restructures, Uniform Commercial Code (UCC) issues, bankruptcy proceedings and regulatory compliance matters. We represent our creditor clients in bankruptcy and state receivership actions and assist in developing strategies and agreements to maximize their recoveries from troubled debtors. We have also represented clients in their capacity as buyers and lenders in sales under Section 363 of the Bankruptcy Code and Chapter 128 of Wisconsin Statutes.
With our experience and legal insight, Liebmann, Conway, Olejniczak & Jerry's Banking & Creditors' Rights Team will add value to transactions by streamlining processes and ensuring regulatory compliance. Our Banking & Creditors' Rights Team forms working partnerships with our clients so that both our firm and our clients can cost-effectively handle and respond to the myriad of legal issues financial institutions and creditors face.
Additionally, our team offers our clients in-house seminars on timely banking topics to keep our clients informed and up to date on current issues. |
Possible Changes to Wage Claim Lien Law May Put Lender's Priority at Risk
Under Chapter 109 of the Wisconsin Statutes ("Wis. Stat."), employees who claim that they are owed unpaid wages from their employer may bring a claim (either on their own or through the Wisconsin Department of Workforce Development ("DWD")) and may file a lien against all property of their employer -- both real estate and personal property -- located in Wisconsin for the full amount of those wages plus penalties and interest. This right is often referred to as a "wage claim lien." Under current law, a wage claim lien takes a "super-priority" over other liens which encumber the employer's assets filed on or after December 1, 2003. In other words, wage claim liens effectively "leap frog" all other liens filed on or after December 1, 2003, even liens which predate the claim for unpaid wages.
There is, however, an important exception for liens of a commercial lending institution that originate before the wage claim lien takes effect. With respect to pre-existing liens to a lender, a wage claim takes precedence only to the extent of the first $3,000.00 of unpaid wages per employee covered under the wage claim lien that are earned within the six months preceding the filing of the wage claim with the DWD or the commencement of an action by the employee to recover the wages that are due.
In February of 2009, Senate Bill 2 was introduced which seeks to make three significant changes to the current wage lien law which will put the priority of liens to commercial lending institutions at an even greater risk:
1. First, Senate Bill 2 seeks to increase the $3,000.00 limit so that a wage claim lien up to $10,950.00 (to be adjusted annually) will take precedence over all liens - even pre-existing bank liens.
2. Second, Senate Bill 2 also provides that a wage claim lien takes precedence over the rights of any purchaser of any property, including any bona fide purchaser that purchases the property of the employer at the time of commencement of a bankruptcy proceeding. This would reverse current law, which allows a bankruptcy trustee to avoid wage claim liens upon a bankruptcy filing.
3. Finally, Senate Bill 2 permits a recognized or certified collective bargaining representative of an employee to file a wage claim with the DWD or to bring a wage claim action in court on behalf of an employee.
Senate Bill 2 has been forwarded to the Wisconsin Assembly for review.
Wisconsin Bankers' Association (WBA) and Wisconsin Manufacturers & Commerce both strenuously oppose the proposed increase to the "super lien" right granted to employees. The WBA has offered testimony before the Senate Committee on Labor, Elections and Urban Affairs and explained that the proposed changes to Wisconsin's wage claim statutes will greatly impair the credit worthiness of Wisconsin businesses which may inevitably lead to more loan denials, business failures and untimely job losses.
Liebmann Conway's Banking & Creditors' Rights Team will continue to monitor this legislation as the Wisconsin Assembly continues to review and debate the merits of Senate Bill 2. Please do not hesitate to contact any of our team members to discuss any questions or comments.
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Banking & Creditors' Rights Team
Attorneys
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