Construction co. settles lawsuit to pay debt (UPDATE)

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A Milwaukee construction company that closed early last year is on the hook for more than $3 million for unpaid commercial loans and other costs.

On Thursday, Milwaukee County Circuit Court Judge Thomas Cooper signed an order in which Castlerock Commercial Construction Inc. and owner Richard Jinkins agreed to a $3,292,900 judgment for Rex Runzheimer, owner of Waterford-based commercial management company Runzheimer International. The settlement covers a $2.8 million loan from Runzheimer, interest on the loan, attorney fees and other expenses.

Runzheimer sued Castlerock and Jinkins in September for defaulting on a series of loans dating back to 2008.

The settlement, though, does not guarantee Castlerock or Jinkins will repay the full amount.

“It’s a judgment; not a payment” said Andrew Oettinger, Runzheimer’s attorney from Godfrey & Kahn SC.

Castlerock and Jinkins’ attorney Thomas Kurzynski, of Thomas W. Kurzynski JD LLC, could not be immediately reached for comment.

A condition of some of the loans, Oettinger said, gave Runzheimer security interest in all equipment, fixtures, inventory and other property owned by Castlerock.

Castlerock defaulted on the loans in February, and Runzheimer took control of $127,331 in assets. But Runzheimer received no further payments.

According to the lawsuit, Jinkins, to secure the loan, listed assets of $2,017,953 and his partner James Worthington listed more than $925,205. Worthington was dropped as a defendant after he filed for bankruptcy.

Oettinger said its unknown how much Jinkins is actually worth.

“Part of the order allows us to take inventory and see what is there,” Oettinger said. “There may not be a whole lot of additional collateral left, but I don’t want to guess.”

Further complicating any recovery for Runzheimer is the potential that two former Castlerock employees could claim a portion of the judgment.

On Dec. 6, the state of Wisconsin filed suit against Castlerock to collect $60,383.92 in unpaid prevailing wage claims. Runzheimer is named as a secondary defendant in the case because of his claim to collateral owned by Castlerock.

Assistant Attorney General Mark Bromley said the potential that Castlerock won’t be able to pay the outstanding claims forced the state to include additional defendants with financial ties to the construction company. But he said he doesn’t know if the state would attempt to claim any of the money owed to Runzheimer.

It is a possibility, Oettinger said, but he argued the collateral previously obtained by Runzheimer from Castlerock wouldn’t be recoverable by the state.

“I think the lion’s share of the assets already taken back were taken back before any of the state’s claims,” Oettinger said.