During the height of the pandemic in 2020 and 2021, court records show attorneys for the Wisconsin Economic Development Corporation (WEDC) filed only two lawsuits seeking loan repayments.
MADISON (WKOW) -- State officials have ramped up efforts to recover $4 million in overdue payments on loans to businesses from varied industries and all corners of Wisconsin.
During the height of the pandemic in 2020 and 2021, court records show attorneys for the Wisconsin Economic Development Corporation (WEDC) filed only two lawsuits seeking loan repayments.
Since the beginning of 2022, records show the number of WEDC lawsuits jumped to fourteen. According to records, state officials said the amount being sought from those lawsuits was at least $3,838,979. A 27 News reporter was unable to review a lawsuit from the group filed in Washington County.
The most recent lawsuit was filed earlier this month against Madison-based Medical Engineering Innovations, Inc. for $524,884. The firm's web site describes the company as producing cutting-edge surgical instruments. Other reports on the company indicate it has also produced advances in cancer treatments. An executive for Medical Engineering Innovations has yet to respond to requests for comment.
Records state failure to both make loan payments and reach loan-required hiring goals were factors in state officials filing the lawsuit.
Court records show the largest loan repayment being sought -- $1,030,653 -- was connected to Milwaukee-based Midwest Energy Research Consortium, Inc.
In the case of a lawsuit against Neenah-based Renewegy, the firm's attorney argued the loan balance should be forgiven.
Attorney Paul Swanson said Renewegy relied on tax credits, incentives and rebates being available to the firm and its customers for wind turbines as it successfully applied for the loan. But Swanson said those tools disappeared and customer demand plummeted during the years of former Governor Scott Walker's administration.
State officials are asking Renewegy for $135,447. A court status conference is scheduled in the case Friday.
Swanson said an agreement has been reached and Renewegy has made a payment to the state. He said he was unable to provide further details.
Renewegy's situation represents a familiar challenge for the state's collection efforts in some of these lawsuits. The firm ceased operations in November 2020.
Another sued firm, Rehab Pulse of Middleton, has a judgment against it for $401,063. When a 27 News crew visited the company's location listed in court records, a representative of another technology firm in the space told them Rehab Pulse vacated last year.
27 News reached out to Rehab Pulse officials and a former member of the Rehab Pulse board issued a statement, saying, “Rehab Pulse encountered various difficulties which led to the company being dissolved late last year. The board of the company worked openly and transparently with WEDC to keep the agency informed of the company’s situation.”
That former board member told 27 News Rehab Pulse has not paid the $401,063 yet.
The Wisconsin Economic Development Corporation (WEDC) invests state taxpayer funds in promising Wisconsin businesses to create jobs and build strong communities," WEDC officials provided to 27 News in a statement.
"WEDC works with these businesses to make sure they succeed; however, to protect the interests of Wisconsin taxpayers, WEDC may as a last resort take legal action if a business is unable to meet its obligations to the state."
