OSHKOSH - The general contractor for the Menominee Nation Arena said the arena’s owner has no cash and is on the brink of insolvency.

In a lawsuit filed Friday, Bayland Buildings Inc. asked a Winnebago County Circuit Court judge to appoint a receiver to oversee the finances and operation of Fox Valley Pro Basketball Inc., which manages the arena. The arena is home to and the Wisconsin Herd, the Milwaukee Bucks' G-League basketball team.

The Hobart-based construction company claims Fox Valley Pro Basketball and its president, Greg Pierce, have defaulted on a $13.2 million mortgage it holds outstanding debt on the construction of the $21.5 million arena.

The lawsuit alleges Pierce frequently misrepresented the organization’s financial condition and had repeatedly failed to live up to agreements to pay Bayland since November 2017, the month the arena opened..

Bayland claims that Pierce provided investors with false financial information to raise money, that Fox Valley Pro Basketball has no cash, and that it also owes money to other creditors, including the Bucks.

“Upon information and belief, FVPB is insolvent or in imminent danger of insolvency,” the lawsuit states.

Pierce did not immediately respond to a request for comment on Friday.

If appointed, the receiver would take control of all of Fox Valley Pro Basketball's property, assets, and liabilities, work with creditors to pay bills and secure the financial investment needed to keep the arena operating, and find a new owner for the building.

In a statement to USA TODAY NETWORK-Wisconsin, Wisconsin Herd President Steve Brandes, said the team is committed to working with Bayland.

"We remain committed today, and in the foreseeable future, to working with Bayland Buildings to operate Menominee Nation Arena and will continue to make it the best venue in the G League,” Brandes said. “We care deeply about the city of Oshkosh, the entire Fox Valley, and our incredibly supportive Herd fans, and are excited to build on the roots we established in this area as operator of the Menominee Nation Arena. We are proud to be part of the community, excited for the upcoming season, and dedicated to continuing the success of G League basketball in Oshkosh."

The Herd exceeded attendance expectations during its inaugural season, selling out 12 of the 24 home games, Brandes told USA TODAY NETWORK-Wisconsin last year. The team draws people from around the Fox Valley and even beyond.

However, other events failed to fill the 3,600-seat stadium, and several high-profile events canceled last minute, including an appearance by former Bucks player Kareem Abdul Jabbar.

Bayland asked Judge John Jorgensen to appoint Oshkosh attorney Paul Swanson as the receiver. Swanson has previously been involved in several high-profile receiverships including Olens's Mill Inc.'s ethanol business in Utica, and attempts to untangle Green Box, a De Pere company that was undone by fraud by its owner, and the Hotel Northland in Green Bay.

According to the lawsuit, Bayland received the $13.2 million mortgage on he property in May 2018 after Fox Valley Pro Basketball struggled to make payments on the construction debt.

Even before the mortgage, Bayland's concerns about Fox Valley Pro Basketball's finances led it to explore filing a construction lien against the property. A lien is the normal recourse for an unpaid contractor, a financial obligation that must be satisfied before the property can be sold or transferred.

But a lien was not possible because the land is owned by the city's Redevelopment Authority and state law does not allow a lien to be filed against public property.

Investor files separate lawsuit

Bayland's lawsuit was filed one day after an investor in Menominee Nation Arena sued Fox Valley Pro Basketball claiming it had defaulted on an $1 million promissory note.

Eric Hoopman, owner of Black Teak Properties claims that Fox Valley Pro Basketball Inc. owes him $1.1 million.

According to court documents, Fox Valley Pro Basketball made $15,000 monthly payments on the loan from April 2018 until January.

The company missed its payments in February and March 2019 and then paid only $5,000 in May and June. It hasn't made a payment since then, and now owes $100,000 in past due payments, the complaint states.

Hoopman declined to speak to reporters from USA TODAY NETWORK-Wisconsin about the lawsuit.

Hoopman’s lawyer, Nathan P. Olson, sent a letter of default to Pierce on Jan. 19, demanding what was then $80,000 in past-due payments.

In the letter, Olson said Hoopman had been eager to help fund construction of the arena, but “now has significant concerns that we hope can be alleviated.”

The letter states that Hoopman and Pierce had multiple discussions about the delinquent payments, but those talks stalled, resulting in the notice that Hoopman would sue if he was not paid in 20 days.

Hoopman was one of 75 investors who provided financial support for the project. Investors could buy in with a minimum of $50,000, according to documents filed in May with the Securities and Exchange Commission.

The documents state the Fox Valley Pro Basketball had raised $19.7 million from investors as of May 1, but was still trying to raise $7.4 million.

The $21 million arena stands in the place of the former Buckstaff furniture company, which the Oshkosh Common Council agreed to demolish in 2016.

The council approved nearly $8.9 million in tax incentives over the course of the development, more than was initially expected because of unexpected environmental issues and other costs. The arena was initially expected to cost about $14 million.

Oshkosh Mayor Lori Palmeri said the city’s agreements with Fox Valley Pro Basketball did not involve any up-front taxpayer money, and the city is not a party to either lawsuit.

“Until we have a little more detail on this, I don’t think it’s safe to say we’re on solid ground, other than we’re not being sued,” Palmeri said. “This certainly doesn’t bode well.”

Contact Lydia Slattery at 920-426-6710 or lslattery@gannett.com. Follow her on Twitter at @lydiaslattery. Contact Jeff Bollier at (920) 431-8387 or jbollier@gannett.com. Follow him on Twitter at @GBstreetwise.