The Social Development Commission Board of Commissioners voted to hold off on a decision about whether to file for bankruptcy during an emergency meeting Monday night.
The resolution is a latest development for the anti-poverty agency, which provided services for decades that included tax assistance, weatherization and job training in Milwaukee County before halting operations amid financial turmoil two years ago.
“I think we’re lacking some information,” said Commissioner Peter Fetzer. Fetzer is an attorney and partner with Foley & Lardner LLP but does not specialize in bankruptcy.
Foley & Lardner drafted a memo for SDC outlining its bankruptcy options, which included filing for bankruptcy under Chapter 7 for liquidation or under Chapter 11 for restructuring. That memo was discussed during a board meeting in July.
Board to explore potential alternatives for SDC
Fetzer proposed a motion Monday to hold off on a decision until more information is gathered on whether filing for bankruptcy is advisable and also about out-of-court alternatives, including a negotiated restructuring with creditors and funders; a sale of assets; a receivership; or an orderly wind-down.
The motion also states that none of those actions will occur “without the separate approval of the Commission at a meeting held in open session, together with any consents required from federal, state, county, or city funding authorities.”
The commission will report its findings during its Oct. 15 meeting.
Though the motion passed unanimously, one commissioner, Richard Diaz, questioned the timing of the decision.
“I appreciate the need to dive in and evaluate the future,” Diaz said. “Why now compared to last year?”.
Jorge Franco, interim CEO and board chair of SDC, said the timing reflected a need to address creditors.
In March, Franco said SDC had $2.4 million in outstanding debt, and limited resources. Still, he said, he does not support the organization filing for bankruptcy.
“I’m a firm believer in you know what? You pay the debts you owe,” Franco said. “I also understand we have a fiduciary duty to go through this process.”
Franco proposed three meetings next week for commissioners to discuss financials and other information that will help the group make a decision. He said each meeting would be limited to four commission members so that they wouldn’t make quorum and thus be subject to open meetings requirements.
New life for former North Avenue headquarters?
Walnut Way Conservation Corp., a Lindsay Heights nonprofit that focuses on environmental stewardship, community engagement and economic development, is seeking to acquire the former SDC headquarters at 1730 W. North Ave.
Along with the Martin Luther King Economic Development Corp., the organization hopes to buy and turn the property into its Milwaukee Interagency Resiliency & Access Centers for Learning & Equity, or MIRACLE Campus.
The 32,400-square-foot property went through foreclosure earlier this year and was repossessed by Forward Community Investments. The headquarters building is currently listed for sale for $2.1 million through Ogden & Company.
According to an electronic survey, the location would serve as the primary site for Walnut Way’s first one megawatt community-owned solar array, which could generate clean energy, workforce development opportunities, a Healthy Homes Hub and other activities to engage the Lindsay Heights corridor.
The survey asked residents if they do or do not support Walnut Way’s efforts to bring the former SDC building back to the community but did not include other questions or space for comments.
What’s next?
The SDC board is scheduled to meet again on Thursday, Sept. 17, from 5:30 to 7 p.m. An agenda for that meeting has not been posted.
Meredith Melland contributed to this report.
Jonathan Aguilar is a visual journalist at Milwaukee Neighborhood News Service who is supported through a partnership between CatchLight Local and Report for America.
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