A Wisconsin state court Tuesday named Milwaukee bankruptcy attorney Michael Polsky, as receiver for Central States Mortgage Co., the troubled credit union-owned CUSO which on its own dropped its long-standing racketeering lawsuit against former CEO and founder Richard Jungen.
The latest court actions are expected to speed liquidation of the Wauwatosa, Wis. CUSO which previously handled mortgage servicing for 250 Midwest CUs until forced to close its doors March 9 and placed into a bankruptcy proceeding before Milwaukee Court Circuit Court Judge John DiMotto.
In the receiver hearing, the Milwaukee court, according to press reports, gave Polsky, a partner in Beck, Chaet, Bamberger & Polsky, the right to refile the CSMC lawsuit, which alleges Jungen and others tried to defraud CSMC of $15 million through a funding scheme.
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Attorney Stephen Kravit representing Jungen, a part owner of CSMC who along with other executives were ousted by the firm last year, told the Milwaukee Journal/Sentinel he expects Polsky to decide the suit is without merit and should remain dead.
David Meany, CSMC's Brookfield, Wis. Attorney, said he expected Polsky to "evaluate on behalf of creditors and the company the pursuit of any claims that the company may have."
Among major creditors of CSMC are a group of Wisconsin banks plus Members United Corporate FCU of Warrenville, Ill. owed $32.5 million on a defaulted funding loan.
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