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Kerkman & Dunn
757 North Broadway, Suite 300
Milwaukee, WI 53202

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Milwaukee Business & Commercial Law Blog

Filing for business bankruptcy is a major decision

Wisconsin business owners know they have two main ways to file for bankruptcy relief under the U.S. bankruptcy code if they find themselves with more debt than assets. Under Chapter 7, all company assets are sold to pay off debt and all business operations end. A Chapter 11 filing, on the other hand, may be more sensible because it allows a business to continue operations after undergoing financial restructuring.

Filing for Chapter 11 bankruptcy is one of the most critical decisions business owners can make, so they must clearly understand the consequences of this type of business bankruptcy. Several factors, including the amount of accumulated debt and the interests of the business owner, are evaluated to see if a Chapter 11 restructuring plan is feasible. If restructuring is chosen, the business may later resume operations.

Injunctive relief and damages over trade secrets in Wisconsin

Business owners in Milwaukee, Wisconsin, would agree that trade secrets are often the key to a business's success. Business owners, irrespective of the size of their businesses, make tremendous efforts to protect a trade secret. As discussed in last week's post, Wisconsin is among the 47 states that have adopted the Uniform Trade Secrets Act and the laws can be found in Wis. Stat. An. Secs. 134.90.

According to the statute, a breach of duty to maintain secrecy, misrepresentation, theft of trade secrets, bribery and espionage are defined as unfair means. Similarly, misappropriation means that nobody, including the state, is allowed to obtain a trade secret through unfair means. Here, unfair means is defined as obtaining the information in a manner that is a breach of the guidelines set by Wisconsin's Uniform Trade Secrets Act.

What does Wisconsin consider a trade secret?

For some businesses here in Wisconsin, protecting a trade secret may be one of the most important priorities. However, unlike other intellectual property such as a registered trademark or patent, where the information or content being protection is publicly known but protected, what separates a trade secret is in its name - the information is proprietary in nature within the company.

The State of Wisconsin has signed into law the uniform trade secrets act, which was developed by the Uniform Law Commission and enacted by the vast majority of states across the country. The act, which can be found at Wis. Stat. An. Secs. 134.90, says to qualify for legal protection, a trade secret must meet two general criteria:

  • The company must make reasonable efforts to keep the information a secret
  • the information must have some level of economic value that comes from the fact that it is a secret and not readily discoverable by others using proper channels

Struggling businesses might benefit from filing for bankruptcy

Milwaukee residents may be interested to hear that Sears has recently announced it will be closing many of its department stores, as well as numerous Sears Auto locations, all over the United States. Reducing the number of store locations may be a sign that a business is not reaping in the profits it once was.

The department store has not indicated whether they will file for bankruptcy, and has said that the reports of store closings were incorrect. However, it appears that after making these statements, Sears added more store closings to their list, putting the number at anywhere from 99 to 131 Sears and Sears Auto stores. Additionally, the list includes a repair center and a distribution center.

Wisconsin businessman facing bankruptcy litigation

A Wisconsin businessman and his adult son were arrested and charged with bankruptcy and bank fraud charges for allegedly hiding assets. The two filed for bankruptcy in 2012, which resulted in the bankruptcy litigation they are now facing.

The two formed a business together where they bought a large amount of Wisconsin foreclosed homes and turned them into rental properties. The father and son saw the success of their business slowly dwindle and their debt increase until they filed for Chapter 11 bankruptcy. The company's financial woes could be due, in part, to the amount of expensive cars and boats owned by the businessman.

Major Apple supplier files surprising Chapter 11 bankruptcy

GT Advanced Technologies surprised everyone, including Connecticut residents and GT's business partner, tech conglomerate Apple, when they filed for Chapter 11 bankruptcy this month. The company is Apple's supplier for sapphire glass, a hard, scratch-resistant glass that Apple uses for its watch screens. Sapphire glass has proved to be very successful, and Apple signed a $578 million dollar deal last year with GT to produce the glass.

Apple was aware that GT suffered some money issues and agreed to loan the company the $578 million in advance. Apple was paying its loan installments, even if GT had not met its required technical milestones. However, Apple withheld the last payment, citing this failure to meet milestones, and GT filed for bankruptcy shortly after.

Should Wisconsin businesses worry about copyrighting their work?

Copyrights and copyright infringement are areas of business law that may seem unnecessary for small business owners. However, some entrepreneurs build their whole business around their original concept, so it is very important that they secure their intellectual property. Wisconsin business owners would benefit from registering their original works with the U.S. Copyright office to ensure it is properly protected.

Copyrights protect original works of authorship, such as literature, music compositions or computer software. Although copyright is enacted as soon as the work is created, it is a good idea to register a copyright, because it proves the origin of the work and allows the registrant the ability to change the form of the original work or to reproduce it. Most important, perhaps, is the fact that registration allows a registrant to bring action against anyone who infringes the copyright.

We can help you with planning your small business

Owning your own business can be one of the most rewarding experiences for Wisconsin residents, but it takes a fair amount of work to get started. A small business owner faces many decisions when getting started, which can quickly become overwhelming. It's often a good idea to speak to an experienced business attorney when planning your business.

Small business owners must begin by asking themselves what kind of business they want to form. Business types include sole proprietorship, a partnership, a limited liability company, and a corporation, to name a few. There are many risks and benefits to weigh when deciding on your business type.

Man steals trade secrets from Milwaukee-area company

Trade secrets, or information that is economically valuable and not generally known to the public, are a vital part of many businesses. While there are state and federal laws in place protecting trade secrets, it's important that Wisconsin businesses do their part in protecting their information as well. Failure to keep this information confidential can lead to major financial damage.

A healthcare company in Waukesha, Wisconsin, has discovered firsthand the effects of trade secret theft. An employee of the company was recently charged in federal court with criminal theft of the company's trade secrets. The man, a Chinese citizen working in the United States on a work visa, downloaded over two million trade secrets during the past 18 months and sent copies to his family in China. Most of the files contained information that the employee did not need to access for his daily job duties.

An overview of Chapter 11 bankruptcy for businesses

Chapter 11 bankruptcy may be able to provide some relief for businesses in the Milwaukee, Wisconsin, area that are struggling with financial issues. Chapter 11 bankruptcy is often referred to as a reorganization of debts. While it is possible for small businesses or even individuals to file for Chapter 11 bankruptcy, it is primarily used by larger businesses in need of debt relief.

A business may file for Chapter 11 bankruptcy by petitioning the bankruptcy court. There is both a filing fee and an administrative fee, which are paid at the time of filing. Failure to pay the fee can result in dismissal of the case. Along with the petition, debtors are required to file a list detailing income versus expenses, a list of assets and liabilities, a list of unexpired leases and contracts, and a financial affairs statement. Additionally, the debtor shall file a written disclosure statement, a plan of reorganization and a request for relief from the court. If the reorganization plan is not available at the time of filing, the debtor can instead submit an intention to file a plan of reorganization.