SIOUX FALLS, S.D. (KELO.com) -- About a year and a half before filing for bankruptcy in federal court last week, Hultgren Construction, LLC was a going concern.
In 2016, Hultgren Construction, LLC, now tied up with the collapse of the Copper Lounge in December 2016, reported over $4.7 million in gross revenue, according to its petition for Chapter 11 bankruptcy (see below).
In 2017, however, gross revenues dropped to just over $16,000. Hultgren did sell off over $100,000 worth of tools and inventory in 2017 and collected over $32,000 in 2016 from the sale of equipment, scrap, and insurance proceeds.
The LLC had just over $3,600 in its checking account at the time of filing last week. It paid its Minneapolis attorneys, Stinson Leonard Street, $16,000 to litigate the bankruptcy.
In the petition, the LLC also needed to note its top twenty creditors with unsecured claims against it. Most of the debts Hultgren consider "contingent, unliquidated, disputed" and are in some stage of litigation. Hultgren assigned "unknown" to the amount it may be liable for in litigation.
Falling into this category include:
- "The Diner," for loss of business/business interruption.
- Bender Commercial Real Estate, for property damage.
- Boomerang Investments, LLC, for indemnification.
- City of Sioux Falls, for damages.
- Fodness Family, for personal injury, property damage,
- IJK, LLC dba Eastwold Smoke Shop, for building damage, business interruptions, landlord/tenant dispute.
- John F. McMahon, for personal injury.
- John J. McMahon, for personal injury.
- Madison Apartments LLC, for property damage.
- PAve, LLC, for property damage, business interruption.
- U.S. Dept. of Labor--OSHA, for alleged OSHA violations.
The following are creditors with dollar amounts attached to them:
- Cincinnati Insurance Company, $4,844,611.95, for subrogation (see below).
- Mid American Energy, $11,469.43, for property damage.
- Paragon Dev't & Consulting Services, LLC, $15,000, for promissory note.
- Progressive, $23,752.35, for subrogation.
- State Farm, $19,738, for subrogation.
- Western National Insurance, $4,945.36, for subrogation.
LLC member Aaron L. Hultgren, also says he is owed an unknown amount of money from the LLC for indemnification (see below).
The LLC claims it has over $4.9 million in priority and unsecured claims against it. This does not include what it might owe if there are judgments or settlements of the pending and filed litigation against it.
The website uscourts.gov explains Chapter 11 bankruptcy: "This chapter of the Bankruptcy Code generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11."
Subrogation, according to Merriam-Webster Dictionary is "the assumption by a third party (such as a second creditor or an insurance company) of another's legal right to collect a debt or damages."
Indemnification, according to vocabulary.com is: "More often than not, an indemnification is usually arranged up-front as a form of insurance against bad things that might happen. For example, a film crew might agree to indemnification before being allowed to film in a particular location. Indemnification has the general sense of being a preventative action, something that protects against any future losses."
Click here to read Hultgren Construction, LLC's bankruptcy petition it filed last week in federal bankruptcy court for the District of South Dakota in Sioux Falls.