CHAPTER 128
CREDITORS' ACTIONS
128.02 Assignment; mistakes; amendments.
128.03 Liens by legal proceedings; assignment.
128.04 Definition of insolvency; time.
128.05 Assignee's consent, recording copy of assignment.
128.06 Assignee required to comply, when.
128.07 Preferred creditors.
128.08 Receiver; custodian.
128.10 Meetings of creditors; removal or death of receiver.
128.11 Provisional remedies.
128.12 Dismissal; intervention.
128.13 Inventory of assets.
128.14 Notice; injunction; time of filing claims.
128.15 Objections to claims; appeal; secured claims.
128.17 Order of distribution.
128.19 Title to property.
128.20 Settlement of receiver's or assignee's accounts.
128.21 Voluntary proceedings by wage earners for amortization of debts.
128.25 Uniform act governing secured creditor's dividends in liquidation proceedings.
128.01
128.01
Jurisdiction. The circuit courts shall have supervision of proceedings under this chapter and may make all necessary orders and judgments therefor; and all assignments for the benefit of creditors shall be subject to this chapter.
128.01 History
History: 1977 c. 449.
128.01 Annotation
Chapter 128 does not encroach upon field occupied by Bankruptcy Act merely because ch. 128 provides for a distribution, either voluntary or not, of assets of an insolvent corporation among its creditors. Gelatt v. DeDakis, 77 W (2d) 578, 254 NW (2d) 171.
128.02
128.02
Assignment; mistakes; amendments. 128.02(1)
(1) Voluntary assignments for the benefit of creditors may be made to an assignee who is a resident of this state, who shall, before taking possession of the property assigned and before taking upon himself or herself any trust conferred by the assignment, file the assignment and deliver to the clerk of the circuit court of the county in which such assignor resides or has his or her principal place of business at the time of the assignment, a bond as required by
s. 128.09.
128.02(2)
(2) No assignment shall be void because of any defect, informality or mistake therein or in the bond, inventory or list of creditors accompanying the same; and the court may direct the amendment of the assignment or of any other paper to effect the intention of the assignor or assignee, or to obtain a distribution of the assignor's assets as provided in this chapter, and any such amendment shall relate back to the time of the execution of the paper. No mistake in filing a copy instead of an original or any like mistake or inadvertent failure to comply with the provisions of this chapter shall void the assignment. No creditor shall, in case a debtor has attempted to make an assignment for the benefit of creditors, or in case of the insolvency of any debtor, by attachment, garnishment or otherwise, obtain priority over other creditors upon such assignment being adjudged void, or in consequence of any sale, lien or security being adjudged void; but in all such cases the property of such debtor shall be administered for the ratable benefit of all of the debtor's creditors under the direction of the court by the assignee or by a receiver.
128.02 History
History: 1993 a. 492.
128.03
128.03
Liens by legal proceedings; assignment. When a lien has been obtained by legal proceedings against the property of a debtor the debtor may, within thirty days thereafter, make an assignment of all of the debtor's nonexempt property for the benefit of all of the debtor's creditors, whereupon such lien shall be dissolved and the property shall be turned over to the assignee.
128.03 History
History: 1993 a. 492.
128.04
128.04
Definition of insolvency; time. A person shall be deemed insolvent within the provisions of this chapter whenever the aggregate of the person's property, exclusive of any property which the person may have conveyed, transferred, concealed or removed, or permitted to be concealed or removed, with intent to defraud, hinder or delay the person's creditors, shall not, at a fair valuation be sufficient in amount to pay the person's debts, or if an execution be returned unsatisfied or if the person shall make an assignment for the benefit of creditors.
128.04 History
History: 1993 a. 492.
128.05
128.05
Assignee's consent, recording copy of assignment. 128.05(1)(1) The assignee shall indorse in writing the assignee's acceptance of the assignment, and shall file such assignment with the clerk of the court in the county where the debtor has his or her residence or principal place of business. The court shall, upon the filing of such assignment, order such assignee to administer the debtor's estate pursuant to this chapter, and the assignee shall be vested with the powers of a receiver.
128.05(2)
(2) A certified copy thereof may be recorded in the office of the register of deeds of any county wherein lands are conveyed by such assignment in the same manner and with the same effect as other conveyances.
128.05 History
History: 1993 a. 492.
128.05 Annotation
Assignee is trustee for both debtor and creditors, but must look primarily to interests of creditors. Voluntary Assignment of Linton v. Schmidt, 88 W (2d) 183, 277 NW (2d) 136 (1979).
128.06
128.06
Assignee required to comply, when. 128.06(1)
(1) The assignee under a voluntary assignment not previously filed under the provisions of this chapter shall upon petition of any creditor without proof of the insolvency of the assignor be required to file the assignment and comply with the provisions of this chapter.
128.07
128.07
Preferred creditors. 128.07(1)(1) A person shall be deemed to have given a preference if, being insolvent, the person has made a transfer of any of his or her property, or has procured or suffered a judgment to be entered against him or her in favor of any other person, and the effect of the transfer or the enforcement of the judgment will be to enable any one of his or her creditors to obtain a greater percentage of his or her debt than any other of such creditors of the same class.
128.07(2)
(2) If the debtor shall have given a preference within four months before the filing of a petition, or an assignment, or after the filing of the petition and before the appointment of a receiver, or after the filing of an assignment and before the qualification of the assignee, and the person receiving it, or to be benefited thereby, or his or her agent acting therein, shall have had reasonable cause to believe that the enforcement of such judgment or transfer would effect a preference, it shall be voidable by the receiver or assignee, and the receiver or assignee may recover the property or its value from such person.
128.07(3)
(3) "Transfer" means the sale or other disposal of or of parting with property or with an interest therein or with the possession thereof or the fixing of a lien upon property or upon an interest therein, absolutely or conditionally, voluntarily or involuntarily, by or without judicial proceedings, as a conveyance, sale, assignment, payment, pledge, mortgage, lien, encumbrance, gift, security or otherwise. The retention of a security title to property delivered to a debtor shall be deemed a transfer suffered by such debtor.
128.07(4)
(4) A transfer of property other than real property shall be deemed to have been made or suffered at the time when it became so far perfected that no subsequent lien upon such property obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee. A transfer of real property shall be deemed to have been made or suffered when it became so far perfected that no subsequent bona fide purchase from the debtor could create rights in such property superior to the rights of the transferee. If any transfer of real property is not so perfected against a bona fide purchase, or if any transfer of other property is not so perfected against such liens by legal or equitable proceedings prior to the filing of a petition initiating a proceeding in insolvency, it shall be deemed to have been made immediately before the filing of the petition.
128.07 History
History: 1993 a. 492.
128.08
128.08
Receiver; custodian. 128.08(1)(1) The court within the proper county may sequestrate the property of a debtor and appoint a receiver therefor:
128.08(1)(a)
(a) When an execution against a judgment debtor is returned unsatisfied in whole or in part.
128.08(1)(b)
(b) When a corporation has been dissolved or is insolvent or is in imminent danger of insolvency or has forfeited its corporate rights.
128.08(2)
(2) Upon application duly made, the court shall appoint as receiver the person nominated by the petitioning creditor or creditors, subject to
s. 128.10.
128.08 Annotation
Where defendant was notified of the proceeding to appoint a receiver and participated in the proceedings, he cannot after the lapse of one year object to irregularities. Home Bank v. Becker, 48 W (2d) 1, 179 NW (2d) 855.
128.08 Annotation
Due process procedures required for determination of receivership are not required for selection of receiver. Anchor Coatings, Inc. v. De Gelleke Co. 71 W (2d) 333, 237 NW (2d) 725.
128.08 Annotation
Power recognized by (1) is inherent power of courts. Northridge Bank v. Community Eye Care Center, 91 W (2d) 298, 282 NW (2d) 632 (Ct. App. 1979).
128.09
128.09
Bond. In order to qualify, the receiver or assignee shall give to and file with the clerk of the court a bond sufficient to cover all property likely to come into the receiver's or assignee's hands, conditioned in the usual manner with surety to be approved by the judge having supervision of the proceedings.
128.09 History
History: 1993 a. 492.
128.10
128.10
Meetings of creditors; removal or death of receiver. 128.10(1)(1) The court may provide for hearings and meetings of creditors to elect a receiver or to pass upon matters submitted to creditors by a majority vote in number and amount of claims.
128.10(2)
(2) The court may, upon notice and hearing, remove any receiver or assignee who is shown to be incompetent or to have become disqualified, or to have wasted or misapplied any of the trust estate; and shall remove any assignee or receiver upon the application of a majority of the creditors who shall represent a majority in number and amount of claims against said estate, and order a settlement of the receiver's or assignee's account and the surrender of all the estate to a successor, and shall appoint the person named in such petition or some suitable person as the receiver's or assignee's successor, who shall qualify in the manner provided by this chapter; and in place of any receiver or assignee who shall die or be removed, may appoint another who shall give bond and administer said estate pursuant to the provisions of this chapter.
128.10 History
History: 1993 a. 492.
128.11
128.11
Provisional remedies. In all actions authorized by this chapter appropriate provisional remedies may be had and final relief administered to the equal distribution of all assets recovered among the creditors of the debtor, and the court may make such orders for the payment of costs and expenses as may be just. An action or proceeding authorized herein for the benefit of all creditors may be taken by a creditor although the creditor's demand is not due at the commencement thereof.
128.11 History
History: 1993 a. 492.
128.12
128.12
Dismissal; intervention. 128.12(1)
(1) After the designation of a receiver or custodian by the court, proceedings under this chapter shall not be dismissed for want of prosecution or by consent of parties until after notice to creditors, and the court shall, before entertaining an application for dismissal, require the debtor to file a list, under oath, of all of the debtor's creditors, with their addresses, and shall cause notice to be sent to all such creditors of the pendency of the application and shall fix a date for such hearing so as to allow parties in interest an opportunity to be heard.
128.12(2)
(2) When proceedings have been commenced under this chapter and are not diligently prosecuted or are so delayed as to cause possible injury to other creditors, any creditor may intervene for the purpose of obtaining a continuance of the administration or dismissal of the proceedings.
128.12 History
History: 1993 a. 492.
128.13
128.13
Inventory of assets. With the filing of an assignment or within ten days after the appointment of a receiver, the debtor shall file with the clerk of the court a correct inventory of the debtor's assets and a list of the debtor's creditors, stating the place of residence of each and the amount due to each, which inventory and list shall be verified by the debtor's oath, but no mistake therein shall affect the rights of any creditor.
128.13 History
History: 1993 a. 492.
128.14
128.14
Notice; injunction; time of filing claims. 128.14(1)
(1) The court shall require creditors to file their verified claims within 3 months from the date of the filing of an assignment or the appointment of a receiver and may enjoin proceedings by any other creditor against the insolvent. The receiver or assignee shall be required to give notice promptly to the department of revenue and to all creditors of the pendency of the proceeding, the injunction against other actions and the time within which creditors are required to file claims. The notice shall be mailed to the department of revenue and to each creditor at the creditor's last-known address and shall be published in the county as a class 3 notice under
ch. 985.
128.14(2)
(2) Creditors not filing claims within the time limited may be precluded from participation in any dividend which may be declared.
128.14 History
History: 1993 a. 492.
128.15
128.15
Objections to claims; appeal; secured claims.
