128.15 Objections to claims; appeal; secured claims.

(1)

(a) At the expiration of the period of time limited for the filing of claims, the receiver or assignee shall file all of the following with the clerk of circuit court:

1. Proof of publication of the notice required under s. 128.14 (1).

2. A list of the creditors to whom the notice was given that includes the debts owed to the creditors, verified by an affidavit.

3. A list of claims filed stating the name and residence of and amount claimed by each creditor who has filed a claim.

(b) At any time after the expiration of the period of time limited for the filing of claims, the receiver or assignee or, upon the receiver's or assignee's refusal or failure to act, any creditor may file written objections to any claim specifying the grounds for the objection. The party filing the objection shall serve a copy of the objection upon the claimant as ordered by the court. Depositions may thereafter be taken as in civil actions. The court, on the application of either party, shall enter an order fixing a time when the objections shall be heard, which shall be served upon the adverse party as prescribed in the order. Upon the final hearing the court shall make such order as shall be just and may compel the payment of costs.

(2) Claims of secured creditors may be allowed to enable such creditors to participate in the proceedings but shall be allowed for such sums only as shall be proved to be due, over and above the value of the securities, and dividends shall be paid only upon the excess of the claim over the value of the security at the time of the commencement of the proceedings.

History: 1983 a. 219; 1997 a. 253.

Judicial Council Note, 1983: The last sentence of sub. (1), providing an appeal deadline of 30 days after entry of order, is repealed for greater uniformity. An appeal must be initiated within the time specified in s. 808.04 (1), stats. [Bill 151-S]

Under this section, a secured creditor may become a party by general appearance or by filing a claim for a deficiency on a secured claim and thus be allowed to participate. The creditor's security cannot be taken away without consent, and the court adjudicating a ch. 128 proceeding can do no more than value the security for the purpose of allowing the unsecured part of the claim. Wisconsin Brick and Block Corp. v. Vogel, 54 Wis. 2d 321, 195 N.W.2d 664 (1972).

The trial court erred in subordinating a shareholder's claim on the grounds that the shareholder's advance to the corporation was a capital contribution rather than a debt when the court did not evaluate the sufficiency of the corporation's stated capital and relied entirely on the corporation's inability to obtain commercial financing. Gelatt v. DeDakis, 77 Wis. 2d 578, 254 N.W.2d 171 (1977).

Under Wisconsin Brick & Block a secured creditor's participation in the receivership proceeding is necessary to establish consent. That case does not suggest that the secured creditor's participation is sufficient, by itself, to establish consent nor does it suggest that the creditor's participation in the proceedings trumps the secured creditor's express objection to the sale of its collateral. BNP Paribas v. Olsen's Mill, Inc. 2011 WI 61, 335 Wis. 2d 427, 799 N.W.2d 792, 09-1007.