Tim Ryan, tryan@wolfrivermedia.com
A sweeping, half-million dollar foreclosure suit against the Samanta Roy Institute of Science and Technology has been dismissed after a newly formed company purchased the debt.
The wide-ranging civil action encompassed 15 properties in Shawano and the town of Wescott owned by SIST and its subsidiary Midwest Properties of Shawano.
The action brought by Wells Fargo Bank of Dallas came to a halt late last week after the bank reached an agreement with a Wisconsin-based limited liability company, according to court records.
VDG LLC was incorporated on July 5, according to the state Department of Financial Institutions.
The registered agent is listed as Jeffery Phillips, an attorney with Sweet DeMarb LLC in Madison. The law firm describes itself as an insolvency boutique representing businesses and individuals who find themselves in financial distress, according to its website.
No other information about VDG was available Tuesday, and court documents do not show the terms of the settlement between VDG and Wells Fargo.
The agreement made VDG the assigned plaintiff in the case, replacing Wells Fargo.
VDG then filed for dismissal of the foreclosure suit and for the discharge of the receiver who had previously been appointed in the case, Terry Hilgenberg.
VDG maintained in its petition that Hilgenberg had been fully compensated for his services as receiver. However, in an email to Judge James Habeck that was also entered into the court record, Hilgenberg said he was not paid for his services.
Court orders dismissing the suit and discharging Hilgenberg were filed Monday.
It is not clear what will become of the properties now controlled by VDG.
Phillips said he could not comment until he has talked with his clients.
According to the civil suit originally filed in December, a number of mortgages and land contracts on the properties were bundled into a single consolidated loan agreement with M&I Bank in 2008 and were backed by a promissory note signed by SIST founder R.C. Samanta Roy, who has since changed his name to Avraham Cohen.
The debts were eventually acquired by Wells Fargo Bank of Dallas, which claimed in the suit that SIST and Cohen defaulted on the agreement.
The suit maintained that $526,388, including interest and fees, was still remaining on the debt.
The targeted properties in the foreclosure action included the Midwest Gift and Fudge House, 104 Old Lake Road; vacant properties at 201 N. Main St. and 202 N. Washington St.; the former Ponderosa Steak House at 1247 E. Green Bay St.; the former Subway at 951 E. Green Bay St.; the former Taco John’s restaurant at 1214 E. Green Bay St.; a property at 143 S. Main St., being rented to Hunan’s Chinese Restaurant, and 145 S. Main St., a vacant property next door; vacant properties at 128 E. Green Bay St. and at 311 E. Green Bay St.; an apartment complex at 117 Mills St.; and three other Wescott properties, N5654, N5660 and N5670 State Highway 47-55.
One of those properties — the former Ponderosa Steak House — was subsequently set aside for a separate sheriff’s sale after a partial foreclosure order was issued in June. That foreclosure sale is still scheduled to take place Aug. 12 at the Shawano County Courthouse.
The suit named nine other creditors as defendants, with Wells Fargo — and now VDG —holding a priority claim on the debts.
However, another court order filed in the case Monday put creditor MMG Financial Corp. first in line for any surplus funds that might come from any sale involving seven of the properties where MMG has a financial stake.
MMG is owed $352,054 on those properties, not including interest, according to the court document.
This was not the first mass foreclosure suit filed against SIST and its subsidiaries. Seven of the properties included in the Wells Fargo suit were part of a suit filed by M&I Bank in February 2011. The suit was dismissed in December of that year after SIST and M&I entered into a forbearance agreement.
The agreement was extended twice, with M&I agreeing not to take action against the properties until after Sept. 14, 2014, after which there was a three-month redemption period for SIST to make good on its debts.
Wells Fargo obtained those debts while that agreement was still in place. The redemption period expired Dec. 14.
SIST has nearly lost several properties over the years to foreclosure actions that were settled at the 11th hour.
However, SIST and its subsidiaries also have lost a number of properties to successful foreclosure suits over the last three years, including the following: an apartment building at 463 Humphrey Circle and 1024 E. Fifth St. in Shawano; the USA International Raceway in Wescott; Kiryat Hotel, now the Four Seasons Resort, 201 N. Airport Drive; El Mariachi Cantina and Grill, 635 S. Main St.; former Family Dollar property at 229 E. Green Bay St.; former Qualheim’s building at 153 S. Main St.