MONROE - The Monroe Common Council Tuesday voted 9-1 against granting a Class B liquor and fermented malt beverage license to Woodford State Bank.
Recommendations to grant the license to the bank came from both the Revolving Loan Fund and the License committees at meetings earlier Tuesday.
Woodford State Bank applied to the city for the reissuance of the liquor license that was originally granted Sept. 1, 2009, to Lisa and Barrett Allman, owners of Barrett's Brick Cafe.
The business has since closed, and the Allmans were willing to surrender the license to the city on the condition that it be granted to Woodford State Bank. The license term ends June 30.
The Allmans had a loan with the city, under the Revolving Loan Fund, for about $95,000. The city has first lien (security interest) on the restaurant equipment and fixtures and a second mortgage on the restaurant real estate. Woodford State Bank holds a first lien on the building real estate for its loan of about $250,000.
The building is under the name Allman Property LLC, and the restaurant is operated under the name Barrett's Brick Cafe LLC.
The Revolving Loan Fund committee Tuesday recommended "packaging" the license with the building real estate and restaurant equipment, which some committee members believed would allow Woodford State Bank to sell the property as a complete business more quickly and at a higher price, and thus, give the city a greater chance at recouping its loss.
Members Mike Doyle, chairman, and Steve Bechtolt voted in favor of the recommendation; Alderman Michael Boyce voted against.
The council discussed the package option recommended by the Revolving Loan Fund committee, but took no action.
The License committee reviewed and discussed the Revolving Loan Fund committee recommendations of granting the Class B license to Woodford State Bank to produce the "package" and voted 2-0 to send the issue to the whole council for discussion with recommendation to approve the granting. Thurston Hanson and Neal Hunter voted in favor; Chuck Schuringa did not vote. All three committee members voted against the granting of the license to Woodford in the council vote.
According to the city legal counsel Todd Schluesche, the Revolving Loan Fund committee will now need to determine what to do about the loan loss. City Attorney Rex Ewald excused himself from representing the city because he is a member of the condominium association where the restaurant is located.
The city could opt to break apart the collateral package, and try to sell the restaurant's personal property (restaurant equipment) alone, Schluesche said. That move would leave Woodford to sell the building to cover its own loan.
Robert Duxstad, legal counsel for Woodford State Bank, said the bank intended to sell the license with the property, but would sell the license without the business, if it was possible and if necessary. At that time, the bank would come back to the city to secure a participation note and the city would receive a portion of the license sale, minus the cost of collection.
The city was looking for some kind of guarantee on return if it granted the license to Woodford State Bank.
"It would be nice to have some kind of floor," Boyce told Duxstad at the Revolving Loan Fund committee meeting, but Duxstad would not give an amount.
"As a secured credit, we have a right to this (license)," Duxstad said later in the meeting.
The license is perceived to be worth something, Duxstad said, but he would not give a specific value; however, he did say the license "may enhance, and may speed up" the sale of the property.
Schluesche advised the License committee that the license could maximize the repayment of the revolving loan, but that the liquor license is not named in the documents of the city's revolving loan with Barrett's Brick Cafe.
After the council meeting, Schluesche said the city has first lien on the business' personal property - the equipment and fixtures, which could arguably include the liquor license.
Bankruptcy for the Allman Property LLC and Barrett's Brick Cafe LLC could put the ownership of the license into the hands of bankruptcy trustees. But time is of an essence, as the license term expires at the end of the month. After that time, the city could refuse to reissue the license.
Green County Circuit Court records show Woodford State Bank filed a lawsuit seeking judgment for the amounts owing on the promissory notes; foreclosure of a mortgage on the Barrett's Brick Cafe restaurant real estate; foreclosure of a mortgage on a residential lot near New Glarus; and repossession of the restaurant equipment and fixtures. Those foreclosures were pending until today, to determine what the city would do.
Recommendations to grant the license to the bank came from both the Revolving Loan Fund and the License committees at meetings earlier Tuesday.
Woodford State Bank applied to the city for the reissuance of the liquor license that was originally granted Sept. 1, 2009, to Lisa and Barrett Allman, owners of Barrett's Brick Cafe.
The business has since closed, and the Allmans were willing to surrender the license to the city on the condition that it be granted to Woodford State Bank. The license term ends June 30.
The Allmans had a loan with the city, under the Revolving Loan Fund, for about $95,000. The city has first lien (security interest) on the restaurant equipment and fixtures and a second mortgage on the restaurant real estate. Woodford State Bank holds a first lien on the building real estate for its loan of about $250,000.
The building is under the name Allman Property LLC, and the restaurant is operated under the name Barrett's Brick Cafe LLC.
The Revolving Loan Fund committee Tuesday recommended "packaging" the license with the building real estate and restaurant equipment, which some committee members believed would allow Woodford State Bank to sell the property as a complete business more quickly and at a higher price, and thus, give the city a greater chance at recouping its loss.
Members Mike Doyle, chairman, and Steve Bechtolt voted in favor of the recommendation; Alderman Michael Boyce voted against.
The council discussed the package option recommended by the Revolving Loan Fund committee, but took no action.
The License committee reviewed and discussed the Revolving Loan Fund committee recommendations of granting the Class B license to Woodford State Bank to produce the "package" and voted 2-0 to send the issue to the whole council for discussion with recommendation to approve the granting. Thurston Hanson and Neal Hunter voted in favor; Chuck Schuringa did not vote. All three committee members voted against the granting of the license to Woodford in the council vote.
According to the city legal counsel Todd Schluesche, the Revolving Loan Fund committee will now need to determine what to do about the loan loss. City Attorney Rex Ewald excused himself from representing the city because he is a member of the condominium association where the restaurant is located.
The city could opt to break apart the collateral package, and try to sell the restaurant's personal property (restaurant equipment) alone, Schluesche said. That move would leave Woodford to sell the building to cover its own loan.
Robert Duxstad, legal counsel for Woodford State Bank, said the bank intended to sell the license with the property, but would sell the license without the business, if it was possible and if necessary. At that time, the bank would come back to the city to secure a participation note and the city would receive a portion of the license sale, minus the cost of collection.
The city was looking for some kind of guarantee on return if it granted the license to Woodford State Bank.
"It would be nice to have some kind of floor," Boyce told Duxstad at the Revolving Loan Fund committee meeting, but Duxstad would not give an amount.
"As a secured credit, we have a right to this (license)," Duxstad said later in the meeting.
The license is perceived to be worth something, Duxstad said, but he would not give a specific value; however, he did say the license "may enhance, and may speed up" the sale of the property.
Schluesche advised the License committee that the license could maximize the repayment of the revolving loan, but that the liquor license is not named in the documents of the city's revolving loan with Barrett's Brick Cafe.
After the council meeting, Schluesche said the city has first lien on the business' personal property - the equipment and fixtures, which could arguably include the liquor license.
Bankruptcy for the Allman Property LLC and Barrett's Brick Cafe LLC could put the ownership of the license into the hands of bankruptcy trustees. But time is of an essence, as the license term expires at the end of the month. After that time, the city could refuse to reissue the license.
Green County Circuit Court records show Woodford State Bank filed a lawsuit seeking judgment for the amounts owing on the promissory notes; foreclosure of a mortgage on the Barrett's Brick Cafe restaurant real estate; foreclosure of a mortgage on a residential lot near New Glarus; and repossession of the restaurant equipment and fixtures. Those foreclosures were pending until today, to determine what the city would do.