An attorney appointed by the village to oversee operations at the Radisson Hotel is seeking expanded authority to safeguard the hotel’s value, and eventually market and sell the insolvent hotel.
Seth Dizard, the receivership attorney appointed in November 2011 by the village of Menomonee Falls, petitioned a Waukesha County Circuit Court judge last week to expand his authority over operations at the hotel. A group of roughly 15 attorneys representing the village, hotel subcontractors, and the hotel’s ownership group appeared during a status conference Monday to discuss the petition.
In the petition, Dizard is seeking the power to market and sell the hotel, as well as quell interference from members of the ownership group, which he claims threatens to erode the hotel’s value. The petition would allow the receiver to remove the ownership group's management authority over the hotel.
Currently, Dizard is only authorized to maintain status quo operations at the hotel, but he doesn’t have the authority to take actions deemed beneficial to the hotel. However, the village’s attorney, Randall Crocker, said negotiations to settle a pending foreclosure lawsuit have reached an impasse, and simply maintaining the status quo won’t be enough to reach an amicable resolution.
“I’m not prepared to abandon an attempt to resolve this case. Falls has the right to proceed with a foreclosure action, which would lead to a sheriff’s sale of the hotel,” Crocker said. “The village authorized me to continue to reach a resolution that provides some better results than that, but its patience and willingness to do so is pretty close to at an end.”
The court scheduled a hearing for Feburary to decide whether to expand Dizard’s authority. According to financial information from December 2011, the hotel was insolvent. However, Dizard has managed to increase profits during his tenure as receiver.
Crocker said expanding the authority of Dizard, and allowing him to market and sell the hotel could avoid the sheriff’s sale and bring resolution to all the entities involved in the foreclosure suit.
In the petition, Dizard noted several financial and behavioral concerns with James Heyden and Dean Grosskopf, who are members of the hotel’s ownership group.
Dizard claims Heyden diverted some $217,000 in hotel funds for his personal benefit last year. Records also show Heyden withdrew more than $100,000 from the hotel’s accounts in several undocumented transactions.
The petition further alleges that Heyden violated a June restraining order that barred him from stepping onto the hotel property. The petition also claims Heyden titled a van purchased by the hotel over to a business he owned. Heyden then allegedly charged the hotel to lease the same vehicle from his company.
The petition also claims five high-profile managers voluntarily left the hotel, citing Heyden's management style as the reason for departure.
Heyden denied the allegations brought forth in the petition Monday. He and his attorney plan to issue a statement combating the allegations.
Last year, Dizard brought an independent financial consultant on board to assess the books at the hotel. According to hotel financial documents, Grosskopf was receiving payments of roughly $10,000 monthly for his work with the hotel. An assistant of his was also receiving $3,500 monthly.
The financial consultant said the salaries of Grosskopf and his assistant were too considering the amount of work they did for the hotel.
If Dizard’s power is expanded, he’ll be able to make changes to Grosskopf’s compensation, and negotiate deals to sell the hotel.