When a company is placed into receivership, it usually means that its debts are greater than its net worth but the owner doesn’t want to give up. Under receivership, a company can get a court to appoint someone to manage the company while it looks for a new permanent owner.
Yesterday, Madison-based company Schoep’s Ice Cream filed for receivership.
Schoep’s Ice Cream employs about 150 people and according to its website produces over 12 million gallons of ice cream a year, and sends its products to all fifty states plus Puerto Rico. However, according to the Wisconsin State Journal, the company doesn’t expect to make enough money this year to pay off its debts. Milwaukee attorney Michael Polsky is currently managing Schoep’s assets while the search for a buyer continues.
“We have funding in place to continue operations,” Polsky says.
“We don’t anticipate layoffs, we’re not asking to change any terms of employment, and we have funding for employee payroll benefits, purchasing raw materials, and all other expenses of the business,” he adds.
Polsky cited the loss of two large customers last year as the cause for the decision, but he declined to identify their names.
David Link is managing editor for the bi-monthly publication Eastside News and lives one mile from the company. He says he was shocked to think that the company could not be part of the fabric of the east side community.
“If anything was to happen… Several years ago there was talk of the Jennifer Street Market moving because Schoep’s owned their space. There was talk that Schoep’s would expand into that, so for them to be the one leaving, I find that very surprising,” Link says.
The company specifically asked for Polsky to be appointed the receiver for the business, even though they previously had no ties. Polsky, says he’s been the receiver for over 300 businesses in the last twenty years. If he doesn’t find a buyer for the company, then Schoep’s assets will be sold off and the company will cease to exist.
Polsky told the Milwaukee Journal Sentinel that “there are a number of qualified buyers that have already expressed interest in acquiring the company,” but he says they’re not getting complacent.
“The company had already started the process of trying to find a buyer before the receivership, and we’re continuing and expanding those efforts,” Polsky says.
Polsky says that 2017 was an extremely successful year for the company, but they could not recover from the loss of those two large customers in 2018.
Schoep’s Ice Cream did not respond to a request for comment by time of broadcast.