Badger Lighting & Signs Inc.’s money woes might help the Brookfield contractor postpone a ruling in a federal lawsuit over paying prevailing wages.
According to court documents, Badger ran into financial hardship when it expanded its sign business to include highway landscaping services in 2011. The company had to buy new equipment, according to court documents, and pay higher wages on state road projects, which “created a strain” on the business.
That strain led to Badger entering receivership. Brookfield-based Spring Bank filed the request Jan. 31 in Waukesha County, and a judge consented, placing Badger into the debt resolution process under John Wirth, an attorney in Mallery & Zimmerman SC’s Milwaukee office.
Wirth did not immediately respond to a request for comment.
Badger, which previously filed for Chapter 11 bankruptcy, withdrew that filing to enter receivership. The reason, according to Badger’s withdrawal request, was that Spring Bank, which had frozen some of the company’s assets, agreed to help Badger meet payroll and operating costs if it agreed to receivership.
Susie Beard, Badger’s president, would not discuss the receivership status, her company’s debts or the prevailing wage lawsuit. But she did confirm the Badger’s operating status.
“The company is still open and running,” she said.
Thomas Boyer, an attorney with Waukesha-based Grady, Hayes and Neary LLC who represents Spring Bank, declined to say how much money Badger owes Spring Bank. But he confirmed a receivership action trumps other litigation.
That adds uncertainty to the federal wage lawsuit involving Badger, Brookfield-based Arctic Landscape & Design LLC and 11 former Arctic employees. Those ex-employees in October sued Arctic, alleging the company failed to pay prevailing wages on four Wisconsin Department of Transportation projects, among other claims.
Arctic in December filed a third-party complaint against Badger, claiming Arctic subcontracted through Badger on the projects in question and wasn’t informed they required prevailing wages. Badger denied those claims.
Bill Parsons, an attorney with Hawks Quindel SC who represents the group of ex-employees, confirmed the lawsuit could be delayed but declined to comment further.
“Things in the case,” he said, “are kind of at a sensitive juncture.”
Badger’s receivership also is affecting it’s representation in the lawsuit. George Erwin, an attorney with Milwaukee-based Schmidt, Darling & Erwin who is representing Badger, said his firm is one of the company’s creditors. Badger’s entry into receivership represents a conflict of interest for the law firm, which has asked to withdraw from the case, Erwin said.
Arctic’s attorneys from Godfrey & Kahn SC, Milwaukee, are doing the same thing, though for different reasons. Attorney Brian Spahn did not immediately respond to a request for comment, but, according to court documents Spahn filed, Arctic has been uncooperative, and continuing to represent the company would “result in an unreasonable financial burden” on Godfrey & Kahn.
U.S. Magistrate Judge Patricia Gorence has yet to rule on those requests.