The University of Wisconsin-Oshkosh Foundation filed bankruptcy in August. The foundation was suffering severe financial problems after making some poor real estate deals. The foundation also purchased former Chancellor Wells’ home, which they purchased for $450,000 in 2013. That was $120,000 more than it was valued at. Wells has since retired.
Now that the foundation is in bankruptcy proceedings, all spending for the nonprofit organization is subject to court approval. The foundation’s funds are separated into two accounts: an endowment fund set up for a specific expenses and an unrestricted fund for other expenses. This past Tuesday, a judge released over $600,000 to see them through to the end of the year and into the first part of 2018. This was following a previous release of $500,000 in September.
Part of the money released from the endowment fund is earmarked for the University of Wisconsin-Oshkosh’s athletic department — $324,000. In previous years, the foundation has helped the Titans with things such as travel expenses to a national championship game. The Titans are once again on a winning streak and hoping to be headed to another championship game this season.
Other expenses the funds are supposed to cover include the mortgage payment on Wells’ home, taxes, admin fees, contractual services and additional unnamed expenses. Attorneys for creditors are arguing that spending money from the endowment fund for the UWO’s athletic department and college projects is money that should be paid to their clients.
Filing bankruptcy does not necessarily mean a person or company, or in this scenario a nonprofit organization, will lose their assets. It can actually be the other way around. Bankruptcy more often provides asset protection. Just as in this case, creditors cannot get their hands on funds that the court feels are relevant to the foundation’s existence.
If you are considering bankruptcy, a Chapter 7 or Chapter 13 bankruptcy can provide asset protection by stopping foreclosure on your home, stopping debt collection calls and stopping repossessions. You can also keep your vehicles if you want to continue making payments on them. You don’t have to cash in your life insurance or retirement policies either. A bankruptcy attorney can provide more details about which type of bankruptcy is best for your situation.
Source: Oshkosh Northwestern, “Thanks to bankruptcy judge, UWO football has help in its national championship bid,” Nate Beck, Dec. 06, 2017