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Badger Corrugating struggles to keep doors open

Paul Snyder
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Despite media reports to the contrary, the president of La Crosse-based Badger Corrugating Co. said Thursday the company has no intention of closing its doors or laying off additional staff.

“We’ve been here for 106 years,” said President Michael Sexauer. “We’ve had some layoffs and dropped 40 people in the last three months, but we still employ about 160 people and we’re looking to continue business as usual.”

Sexauer said the 60-day closure notice the building materials distributor recently filed with the state was done as a “precautionary measure” for legal purposes. He said media reports of foreclosure and continued layoffs are overstated.

“I liken it to old ladies sitting at the corner store and retelling the story,” he said. “It just keeps getting bigger and bigger.”

Associated Bank is seeking full repayment on a line of credit provided to the building materials distribution company four years ago, Sexauer said.

“They changed their minds and decided they wanted the whole thing paid off immediately,” he said. “Well, we can’t do that right now. We’ve done what we needed to do (in staff cuts) to try to make it work, and we think we’re going to be OK.

“But honestly, business is not what it was two years ago.”

Badger’s attorney Michael Van Sicklen said the bank is seeking roughly $12 million from Badger. The line of credit, Van Sicklen said, is being used for general operating expenses.
Associated Bank also is seeking a court-appointed receiver to oversee operations at the company.

According to an Associated Press report, the bank’s attorney, G. Jeffrey George, said its loan to Badger now exceeds its assets by $1.5 million.

George declined further comment and representatives from Associated Bank did not return a call  for comment before deadline Thursday.

A hearing about the receivership request is scheduled for March 3 in La Crosse County Circuit Court. Van Sicklen said both parties will try to reach agreement before the court date.

“I’m guardedly optimistic we can work something out,” he said.

The La Crosse area contractor market is smaller than the market in other parts of the state, said Vicki Markussen, executive director of the La Crosse Area Builders Association. She said it therefore can be difficult to read the effects of the economy on businesses.

“There are no big storefront ‘going out of business’ signs,” she said. “The nature of the building industry is that it works in peaks and valleys, and we find a lot of contractors in the area may sit dormant for awhile and try to retain staff as long as they can for when the economy does recover.”

Badger distributes building materials across Wisconsin, Minnesota, Iowa and Illinois.

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