Todd Brunner and two partners persuaded the City of Waupun to commit $275,000 toward the conversion of the city’s former high school into an assisted-living facility. Beset with delays and contractors’ complaints of nonpayment, the building attracted few residents when it finally opened. Credit: Michael Sears

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Most people who file for bankruptcy don't tool around town in a Bentley or make waves on Pewaukee Lake in a cigarette boat.

Todd Brunner is not most people.

Brunner, 54, quietly built a real estate empire in the 1990s and early 2000s largely by cashing in on the broken dreams of others. A fixture at sheriff's sales, Brunner bought hundreds of foreclosed properties throughout southeastern Wisconsin, turning them into rental units. "He was there like clockwork," said one sheriff's sale competitor, who noted that Brunner "even had his own desk" at the Milwaukee County sheriff's sales - a setup Brunner confirmed.

Brunner was able to repeatedly upgrade his home near Pewaukee Lake and put together a collection of pricey cars and boats, with vintage models manufactured as early as 1918. He and his companies own more than 200 properties, the bulk of them in Milwaukee, with an assessed value of more than $23 million - though many are encumbered with loans.

In its heyday, Brunner said his business of rehabbing and renting properties was generating at least $1.5 million to $2 million in annual revenue. In August, his business generated more than $145,000 in revenue, records show.

Today Brunner faces nearly $20 million in debt and is struggling to hang onto his crumbling empire. He filed for Chapter 11 bankruptcy protection in June - the second time he has sought bankruptcy court protection.

Sources say at least two police agencies are looking into some of his business dealings, while creditors and the U.S. Trustee's Office are scouring his holdings to determine the value of his assets.

Brunner said he is not concerned about any inquiries into his dealings - by law enforcement, the trustee's office or creditors.

"You could look into any dealings that you want," Brunner said during a 90-minute interview in his sparsely decorated home office. "I'm proud of every deal I've ever done."

Brunner's woes are being felt from Milwaukee - where he owes more than $880,000 in property taxes - to Waupun, where the city poured $275,000 into a rehab project that failed. The $2 million project was spearheaded by Brunner and two partners. The city hopes to recoup its money through increases in taxes on the now-foreclosed property, a 98-year-old building that had been the town's high school.

All told, Brunner and companies he is involved in owe about $1.5 million in back property taxes to local governments throughout southeastern Wisconsin. He has more than $24 million in assets, according to records filed with his bankruptcy.

Brunner blames the struggling economy and the Waupun project - most notably a $2.2 million court judgment that is hanging over him and the two partners - for forcing him into Bankruptcy Court. The complex case has been dragging through contentious hearings, during which Brunner has been questioned about the value and location of his assets.

Brunner admits to being a bad record keeper, but he said a former secretary made matters worse when she - one of several former associates who've had bitter breakups with him - threw many records away in a snow bank last winter.

Some may see that as a "dog ate my homework" explanation, though Brunner stands by it. "It is what it is," he snapped during the interview.

Brunner hasn't filed a tax return since 2008, and his bankruptcy petition lists a $65,000 income for his wife, Sharon, but none for him.

Attorney Patrick Schoen is annoyed with Brunner's poor records and his refusal to pay up. He deposed Brunner in July after he was unable to collect a $5,300 judgment for a family that briefly rented from Brunner's Investment Specialists of Pewaukee LLC.

"This is a pretty egregious situation," said Schoen. "Where does he get the money to buy all those assets? . . . If it comes from the tenants, then where are the records?"

Living in style

Despite his bankruptcy filing, Brunner appears to be enjoying a comfortable lifestyle. He lives in a spacious home on a 2.2-acre lot near Pewaukee Lake that is equipped with five garage doors and a detached barn/garage. A pirate-style skull and crossbones flag sometimes flies in his front yard.

He and his wife own $50,000 in jewelry, several big-screen televisions and a stable of expensive playthings, including a 2006 Bentley, three boats, a 2000 Porsche Boxster, a 1984 Rolls-Royce, a 1959 Jaguar, a 1918 Rauch & Lang electric car, a couple of Cadillacs and a Harley-Davidson motorcycle. Bankruptcy records list about two dozen vehicles and boats, including several trucks and vans that are used in Brunner's businesses.

Those seeking money from Brunner range from government units trying to collect taxes to lenders such as First Business Bank Milwaukee, owed more than $2 million.

Several express frustration at Brunner's impressive holding and their inability to collect.

"A guy doesn't usually come out here in a Bentley to tell you he can't pay you 1,900 bucks," said David Wilhelm, president of Lisbon Storm, Screen & Door, which has done business with Brunner companies for years.

Brunner offers no apologies for owning a collection of pricey vehicles at a time when his creditors are clamoring for payment.

"I might have some cool toys - I still do," Brunner said. "But I worked for everything I own."

Ex-football star

Brunner is a onetime high school football star who brags he bought a Corvette and his first house while attending New Berlin Eisenhower High School. Several associates said Brunner told them about having played in the NFL, though no records of a pro football career could be found, and he declined to answer questions about it.

Known for his business acumen and his temper - a trait former workers spoke of, and documented in police reports on neighborhood squabbles - Brunner became king of the sheriff's sales in the 1990s and early 2000s.

"He was part of a group that was there all of the time," Capt. Kevin McDonald of the Waukesha County Sheriff's Department said of the weekly auctions. "He was always prepared, knew what he was doing."

Milwaukee County records show he bought nearly 200 properties at the sheriff's sales since 2004. He also bought untold additional properties in surrounding counties. Brunner also bought properties in private transactions.

Katherine Kirkbride, 38, is Brunner's former office manager, and she ended up in bankruptcy herself after a financial dispute with Brunner. She recalled how people losing their homes sometimes would approach Brunner at the sale to see if they could rent the home they just lost.

"He had money and he could buy houses pretty fast," she said.

Brunner did not appreciate others encroaching on his domain. At about 6 feet, 5 inches and around 400 pounds, he could be an imposing figure.

"He would use his size to intimidate you," said Dennis Witthun, 43, Kirkbride's brother, who worked with Brunner off and on for more than 20 years before breaking ties last year. Witthun said one of his duties was to sell Brunner's properties, and he frequently had a dozen or so properties listed at one time.

If Brunner's physique didn't intimidate people, his wallet did.

If a person who was not a regular at the sheriff's sales bid on a property Brunner was eyeing, he would bid the price up even if it meant he overpaid.

Said Brunner: "I didn't like it when people came to play in our backyard."

Brunner takes great pride that he did not regularly flip properties and his rentals were generally kept in good condition. Milwaukee Department of Neighborhood Services spokesman Todd Weiler called Brunner "a typical landlord." Inspectors had few complaints with him, and Brunner generally made repairs demanded by city inspectors.

Kevin Zokan, a Milwaukee real estate agent who listed 52 Brunner properties last year - none was sold - said the homes were all in excellent shape and that he heard no complaints from Brunner's tenants.

"I've never come across so many people who rent from a guy they like," he said.

By Brunner's admission, some of his success was aided in large part by Clyde OQuinn, whom Brunner called "my right hand."

For about 15 years, OQuinn used his extensive contacts on the north side to help find properties and tenants and to keep the rentals in good condition. But, like Kirkbride, Witthun and Julie Sweet - the secretary Brunner accused of ruining his records - his break with Brunner was acrimonious.

OQuinn wasn't paid a set salary and instead received cash payments from Brunner.

"He would collect the rent and then come over with all this cash and all the receipts," said Kirkbride. "Then, he would say 'Here's what you get Clyde.' "

OQuinn confirmed the arrangement in an interview in late August, days before he suffered a heart attack and died. OQuinn said his big payday was going to come after he retired, because Brunner promised to give him title to the house he was living in - a verbal arrangement confirmed by Brunner.

That deal fell apart last year when business slipped because of the economy and OQuinn's relationship with Brunner soured. Instead of being given the deed to the house, OQuinn was served with eviction papers in December.

Brunner later told Waukesha County sheriff's deputies that months earlier OQuinn stole nearly $25,000 from him. He's also alleged OQuinn set one of his trucks on fire. No arrests were made, and the theft case was placed in the dormant file in February, a month after the claim was made.

Assisted-living debacle

The sharpest blow to Brunner came in Waupun, where Brunner and Witthun - who were passive investors in an assisted-living center in Whitewater - decided to open and run a similar center themselves. Neither man had experience in developing an assisted-living facility.

Teaming up with Rob Simonson of Madison, who manages assisted-living centers, the trio created a limited-liability corporation to buy the city's old high school. The Fond du Lac County Economic Development Corp. lent the group nearly $100,000 and they secured $2 million in financing from First Business Bank. The city pitched in with a property tax break for the project, which was to be completed in 2009.

Before long, the three partners got into disputes, and the project fell behind and went over budget, with subcontractors complaining they were not being paid.

"The whole deal was undercapitalized," said Simonson, whose role was to manage the facility after it opened.

Brunner, who initially was not a visible part of the project, took control of it in late 2009 and blamed Witthun for the problems, said Waupun Mayor Jodi Steger.

Brunner continues to blame Witthun, who responds that it was Brunner who controlled the purse strings. Brunner argues he took the biggest hit on the deal because he mortgaged some of his properties to raise cash to bail out the project.

The city felt it had little choice but put money into the project, settling on the $275,000 figure. The other option was having a large, vacant, partially rehabbed building in a city neighborhood on the edge of downtown, the mayor said.

The project opened in August 2010 - a year and a half behind schedule - and Steger and others say it was well done. But only two or three people signed up to live there. The shadow cast over the project was too great to overcome, Steger said.

"When you're a small community and a project is repeatedly put on hold and people aren't being paid - that's enough to keep people from signing up," Steger said.

The project's image in Waupun wasn't helped by Brunner's style, Steger said.

"He came up here in the fancy car, dragging a big boat, and we were wondering what the heck is going on," Steger said. "We have a project stalled here. 'What the heck is going on here, Todd?' "

The facility, called Whispering Oaks, soon shut its doors, and First Business Bank and the economic development corporation began collection efforts. First Business Bank filed a foreclosure lawsuit. Each of the three partners personally guaranteed both loans

Witthun expects to file for bankruptcy soon because he can't cover the loan guarantee, and Simonson already has filed. Unlike Brunner, who filed for Chapter 11 bankruptcy to reorganize his holdings, Simonson filed a Chapter 7 bankruptcy, which calls for the liquidation of assets. Witthun said he expects to do the same. In a liquidation, nearly all of their assets will be sold to pay off creditors.

Protecting businesses

Brunner is hoping to use Chapter 11 to keep his businesses operating and hang on to many of his assets. His attorney, Jonathan Goodman, said Brunner undoubtedly will have to sell some real estate and other assets as part of the process of reorganizing his debts and paying creditors. Brunner is involved in 14 limited-liability corporations, bankruptcy court records state.

First Business Bank won its $2.2 million judgment against Brunner and his ex-partners in March, triggering a timetable that ensured Brunner would make a quick run to the bankruptcy court.

By filing in June, within 90 days of the First Business Bank judgment, Brunner hopes that debt is ultimately handled like all of his other unsecured debts - that is, he will pay a portion of it, the remaining debt will be forgiven and the bank will not be able to try to collect later by putting a lien on his properties.

In a bankruptcy reorganization, the entity filing bankruptcy offers unsecured creditors a payment plan that provides them with more money than they would likely receive if the filer's estate were liquidated.

Often creditors receive a small percentage of what they are owed.

"It may be pennies on the dollar, but it's more pennies than they would have gotten had they liquidated," said Michael Watton, a Milwaukee bankruptcy lawyer not involved in this case.

The goal of the person in bankruptcy is to emerge from the process as a going concern - in Brunner's case, that means he would continue to run his business of buying, selling and renting out properties.

Though Brunner has yet to propose a payment plan, his creditors have made it clear they want to know the true value of all of Brunner's assets.

"He has to produce all of the documents," said Albert Solochek, attorney for the creditors' committee.

Brunner has been questioned under oath by creditors three times. He and his wife have been ordered to provide additional testimony in depositions.

During the hearings, creditors have been openly suspicious of Brunner, in part because last year he transferred properties to two companies that named his college-age son as an organizer.

Milwaukee bankruptcy attorney Leonard Leverson said moving property around before filing a bankruptcy raises suspicions among creditors, although it can be legal if the intent is not to "hinder, delay or defraud creditors." Leverson is not part of the Brunner case.

At the direction of Goodman, Brunner's attorney, the properties have been returned to Brunner's name.

"As long as we disclosed it in our filing, no one could accuse it of being a fraudulent transaction," he said, but acknowledged: "The transfers of those properties were not . . . kosher."

Goodman, who expects to be paid at least $250,000 for representing Brunner, acknowledged that moving properties to corporations linked to Brunner's son continues to haunt his client.

"They think the guy is hiding something," he said. "You try to tell them the guy hasn't filed tax returns and he doesn't have good records, and they don't believe him."

The transfers combined with the missing records would justifiably spark questions about the true size and value of Brunner's holdings, said David Leibowitz, a bankruptcy lawyer with offices in Wisconsin and Illinois.

"In a case like this, it's not surprising that somebody should look at this with suspicion," said Leibowitz, who is the author and editor of the American Bankruptcy Institute Fraud Manual. "When you see these kinds of things in a case, eyebrows get raised and people look at things very closely."

Leibowitz is not involved in the Brunner case.

Planning ahead

Brunner clearly sees himself emerging from the bankruptcy and running a successful operation. "Every self-made man has filed bankruptcy at least three times in his life," he said.

Brunner also apparently hopes to still be boating after the bankruptcy is settled.

One week after he filed for bankruptcy, two of his employees were stopped by Waukesha County sheriff's deputies on a railroad track that runs behind Brunner's home. They told the deputies they were trying to dig a hole under railroad track to lay wire to operate Brunner's boat lift on Pewaukee Lake, according to a police report. The employees, who were charged with trespassing, said they were acting on Brunner's orders - a statement Brunner confirmed to police and in an interview.

"Utilizing his real estate assets, he could keep his toys, potentially," Goodman said. "There's just a certain amount that you squeeze from somebody like this. The alternative, which is not very good, is a liquidation."

Goodman and Brunner argue that the fancy cars and boats are not worth as much as people might think. "This is not the time to sell boats - everybody is hurting," Goodman said.

Goodman also argued it is fair for Brunner to pay what he can and keep some of his properties and the business, rather than be forced to liquidate everything.

"It doesn't do the public any good to have all these properties go back to the banks . . . who are incapable of operating these properties better than the owners," Goodman said. "If the public thinks that they're getting away with murder, that would not be my opinion."

While Brunner's Bentley is distinctive transportation, he is far from the only person who could drive to bankruptcy court in style.

"Many people travel to bankruptcy court in Bentleys, not so many . . . in Chevrolets," said Leibowitz. "If you're a businessman driving a Chevrolet, you've probably been a frugal businessman and stayed out of trouble."

Leverson noted that rich people can get into financial trouble, too.

Many are able to keep their rides, fancy digs and jewelry after a bankruptcy - provided they convince creditors the payment they're getting is greater than they would receive in a liquidation bankruptcy.

"Chapter 11 is truly Let's Make a Deal," Leverson said. "It's all Monty Hall."

Ben Poston of the Journal Sentinel staff contributed to this report.