As reported by the Stevens Point Journal for Central Wisconsin Business, Mayor Andrew Halverson has filed for bankruptcy protection as he has had to shutter his men's retail store, Andrew's Limited; and some city council members responded by stating that his bankruptcy has little to do with the way he handles the city's money.
On February 26 Halverson filed for Chapter 7 bankruptcy in the Western District of Wisconsin's U.S. Bankruptcy Court.
Stevens Point Mayor Halverson told reporters, "This was by far the hardest decision myself and my family has ever had to make. It was so hard for me to accept that a dream was no longer a reality."
Assets in the filing were listed as $492,510 and liabilities were listed at $526,139. Shana Halverson, Andrew Halverson's wife, was also named in the filing. Clothing, media and utility companies, along with family members, were some of the 50 creditors listed.
According to the filing $225,013 is owed to creditors and directly related to Andrew's Limited.
Andrew's Limited, Halverson's first business, was considered to be an upscale retail store. But over the years fine clothing stores, according to Halverson, were becoming "an obsolete business model."
In defending his credibility as the Mayor, Halverson said that people should look at the whole of his work since his 2007 election. He claims that the fall of his personal business has nothing to do with how the city is being run. The city has had a balanced budget and seen a positive development of construction projects since he began working at City Hall.
District 1 council member Andrew Beveridge commented that the store's closing "doesn't necessarily say anything about the well-being of the city finances. For some people, it's the most appropriate step to take."
District 2 council member Joanne Suomi admitted to being taken by surprise at hearing of Halverson's bankruptcy filing. However, Suomi commented the bankruptcy of a retail store and a well-run city are obviously "two totally different scenarios, they're not related."
Before filing for bankruptcy, Halverson attempted to gain funds and pay off some of his creditors by liquidating his store's remaining merchandise. Halverson commented, "When I realized that that was not an option, by mid-January, I realized (bankruptcy) was going to be inevitable."
In 2005 Halverson was named Wisconsin Young Entrepreneur of the Year and Portage County Entrepreneur of the Year.
In 2007 the store was made $550,000. However, starting in 2008, according to Halverson, the store saw a decrease in sales – by a full half – due to the economic downturn and a "dramatic increase in competition." At that time he began to use his personal savings and credit to keep the store afloat.
Halverson told reporters that by 2009 he should have closed it "immediately."
Halverson added, "When you encounter the largest recession in the country in 50 years, you always envision it's short term; it will bounce back. You have to make some aggressive moves to stay alive, and we did. We took on a ton of debt."
If you need to file for bankruptcy contact a bankruptcy attorney for help protecting your assets and sorting through your liabilities as pain free as possible.