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Monday, August 27, 2018

Michelle and Craig Benson and a failed business with an SBA balance owed. There is no Schadenfreude on this, for it was a real business, not that dumb summer camp stuff Sean Nienow stuck the SBA on a few years back.

Small businesses entail risks. This one was reported as a steel fabrication shop, and if steel tariffs at the federal level was a contributing factor, it went unreported by Strib, which per an Aug. 27 item, did report:

State Sen. Michelle Benson and her family are facing financial distress, with her husband Craig Benson seeking personal bankruptcy protection after he bought a business in 2013, only to see it fail.

"We took a risk, and we failed, and we worked really hard for 5 years, paid our employees, followed the rules and it still didn't work," Michelle Benson, a Ham Lake Republican, said Monday. "And now my husband is trying to protect his family."

Benson is the influential chairwoman of the Senate Health and Human Services Committee and a deputy majority leader.

[...] Craig Benson's bankruptcy filing lists about $630,000 of assets — most of that comprising the couple's $500,000 home in Ham Lake — and $2.12 million in liabilities, including $1.3 million owed to the federal Small Business Administration. The now defunct company, Hugo-based Micra Enterprises, was a steel fabricator.

Creditors appear to have cut quite a bit of slack. The small business sole proprietorship I know most about, a computer and communications consultancy that stayed viable through the Year 2K tech bubble collapse did not have such accommodating creditors. Vendors imposing cash and carry vs. credit differs greatly from a run-up of two million, half owed the federal government [i.e., owed U.S. taxpayers].

Creditworthiness is of course a subjective call, the accounts can show a pattern but how a pattern is allowed to remain or grow will vary from person to person and from enterprise type to enterprise type.

Nienow's situation was different. Why SBA lent even a penny there is unknown to me. You only know what you read in the news unless you comb over court files, but the Nienow thing seemed to have a miasma to it whereas I would cut the Benson family more slack.

Republicans tanking businesses and perhaps stiffing SBA [indirectly taxpayers] while talking up fiscal responsibility has always amazed me, but the Bensons are as they are, and at least it was a real business, not some hobby stuff.

Whether the SBA should be more aggressive in protecting federal funds in making loan decisions can be debated, but its purpose is to promote small business by making credit available, so it is simply doing its job unless some kind of insider action on the SBA loan brokering was at play. Strib reporting did not identify the SBA loan brokering operation involved in the Bensons' situaiton, which would be good news to know.

Hanky-panky in SBA lending doubtlessly is the exception and not the rule. It is sad that the venture did not meed success with good returns on the investment.


_____________UPDATE_______________
Further detail: Michele Benson per her LinkedIn filing has held herself out to the public as "OWNER" of the business although in the most recent Strib reporting key involvement is shifted to husband Craig Benson; her LinkedIn page stating:

Micra Enterprises
Owner
Micra Enterprises
2013 – 2015 2 years
Hugo, Minnesota

Engaged in every aspect of operations of Micra Manufacturing. The metal fabrication company serves clients ranging in size from individuals to international corporations. We focus on partnering for success with customers. Our employees are key to the success of our company and they join us in the mission of responsive, high-quality, on-time product delivery.
As part of the executive team share accountability for all aspects of the business including human resources, customer relations, marketing, insurance, vendor relations, and financial oversight.

[screenshot taken] Whether such a public representation is legally binding in any way would be for a bankruptcy expert to consider. It does attach her name to the venture, apparently by her affirmative LinkedIn filing.

August 11, 2018, Strib "Recent Bankruptcies" discloses:

Craig A. Benson, as surety for Gusset Design, Micra Enterprises Inc., Micra Manufacturing and Micra Properties LLC, 2022 144th Lane NE., Ham Lake; filed Aug. 7, 18-42540; Chap. 7; assets, $629,662; liabilities, $2,125,240.

It is neither the normal practice nor unusual to use several business names, but both a Minnesota corporation and an LLC are listed; Secretary of State filings respectively here and here.

UCC personal property security interest lien filings with the SoS were not researched. That would include security interests, if any, filed with the SoS upon automobiles, business inventory and equipment, which could be such a firm's major assets. Whether security interests in a firm's payables would be UCC filed with the SoS; you tell me.

Benson appears to have used his veteran status to assist gaining SBA "Veteran Advantage" credit; see, here, here, here [in listing], and here.

Thomas.net, here, notes without a date:

Neos Industries - Forest Lake, MN

Custom Manufacturer*, Finishing Service Company

Neos Industries (formerly Micra Manufacturing) is a custom manufacturer, with a fabrication and machine shop. Specializes in metal fabrication, laser cutting, CNC machining, CNC forming, welding, abrasive blasting, and industrial painting. Offers swift turnaround and are capable of complex jobs from prototyping to full production. Serves multiple industries using fast implementation processes.

with a link over to here:

Neos Industries

Forest Lake, MN 55025 | map

Call: 651-900-5548

Profile

Products / Services Offered
Painting Services

Painting Services: Industrial
Painting Services

All Products / Services

Blasting and Peening Services
Cutting Services
Fabrication Services
Forming Services

Machining
Painting Services
Shearing Services
Welding Services

Readers and creditors likely might have a better understanding, but some kind of possibly ongoing successorship might/might not apply, per the "Neos Industries" business name. Neos was not further researched.

It appears the Bensons' venture aimed at precision tooling use for high-tolerance production, prototyping, etc., and not heavy commodity steel fabrication as if rebar bending or steel cutting/welding for high pressure refinery usage; etc., so that recent tariff impositions likely were not a failure factor.

SBA notes it is not a lender, but a loan guarantor. If the borrower defaults and the SBA makes payment it likely would then take an assignment and deal with the debtor from a secured creditor position; i.e., not as one of the unfortunate unsecured creditors.

SBA lending types and flavors exist in several forms, e.g., the CMDC pages here and here. Details of SBA use of firms such as CMCD would be known by experts in SBA lending, an exertise not held by this site's author. What is presented here, with links, are returns from brief web searching.

CMDC posts "Success Stories" citing specific borrowing firms.


______________FURTHER UPDATE______________
A Republican penchant for business effort leading to failure is not limited to the Bensons and Nienows. Former Ramsey City Council Member David Elvig's cabinetry, custom business fixtures and furnishings business had been featured as a CMDC success story, per earlier Crabgrass posting. When the housing bubble broke in 2006-2008, it failed. In that instance an actual market disruption led to an ongoing firm hitting the shoals.

It is anecdotal evidence, but Republican politicians Elvig, Nienow and the Bensons all tried their hand at running a business that did not last; Elvig having years of success as a history before his market turned on him. Presumably the Benson venture kept mandated earmarked reserves as required by law, and will not face any difficulties that way.

Yet the Republicans are the ones touting business savvy among their ranks and adherents. Nienow still seems to tout such things. Others who have contributed to Republicans but never sought office have done okay, with key Freedom Club folks, and Bill Cooper, having their track records as examples that way.

______________FURTHER UPDATE_______________
The SoS registration for "Neos Industries, Inc." is online here. How that squares with the Bensons' situation is unclear.

______________FURTHER UPDATE_______________
With the initial Strib quote noting "about $630,000 of assets — most of that comprising the couple's $500,000 home in Ham Lake" that leaves only $130,000 as the value of the precision machining equipment, CNC and laser tooling, which seems a depreciated rather than new price, at a guess, where again prices in that market were not researched. Perhaps the low number represents unencumbered equity in such hard assets, but there should be a UCC financing lien filed unless the equipment was paid off free from the general loan proceeds.

Questions like that are what Bankruptcy Court judges get paid to resolve for parties picking at the bones.

_____________FURTHER UPDATE_______________
As of Tuesday, Aug 28, 8:00 am, only the Strib reporting is online about the Benson bankruptcy filing.

As to how "Neos Industries" fits into things, three links, here, here and here, give three different addresses, the first in Hugo, the second in Forest Lake, and the third in Wayzeta.

The accompanying image is from the second link. The third link gives different information from the current online SoS filing.

It is confusing. There must be an explanation not apparent from cursory web searching. The confusion might arise in Bankruptcy Court if there is a business successorship or a previous acquisition of business assets. The venture as presented with a Forest Lake address appears to be an ongoing business with its webpage

https://neosindustries.com/

behind a login screen (unusual for a going business).

Noteworthy:

This link:

Neos Industries, Inc. is a Minnesota Business Corporation (Domestic) filed on February 1, 2016 . The company's filing status is listed as Active / In Good Standing and its File Number is 870259900024.

The Registered Agent on file for this company is Berns Knight Pa and is located at 155 E Lake Street Suite 210, Wayzata, MN 55391. The company's principal address is 155 E Lake Street Suite 210, Wayzata, MN 55391.

This link:

About Neos Industries
Your Partner in Quality Metal Manufacturing
Doing business since 1981, Neos Industries (formerly Micra Manufacturing) is your comprehensive fabrication and machine shop capable of meeting all of your manufacturing needs. We specialize in metal fabrication, laser cutting, CNC machining, CNC forming, welding, abrasive blasting, and industrial painting. We offer a swift turnaround and are capable of complex jobs from prototyping to full production. We’ve helped our clients with thousands of projects across multiple industries and our refined implementation processes allow us to complete your project fast. On time, every time.
Neos Industries (as Micra Manufacturing) was recognized by our local Hugo Business Association as an Emerging Business of the year in 2015 and we have continued to reach new milestones every year.

Sites such as these, aggregating and posting contact information, can often be giving outdated data. Which could add to confusion.

____________FURTHER UPDATE_______________
Adding to confusion the Strib "RECENT BANKRUPTCIES" page does not list "Neos Industries" for the voluntary [Chap.7?] filing:

Craig A. Benson, as surety for Gusset Design, Micra Enterprises Inc., Micra Manufacturing and Micra Properties LLC, 2022 144th Lane NE., Ham Lake; filed Aug. 7, 18-42540; Chap. 7; assets, $629,662; liabilities, $2,125,240.

_____________FURTHER UPDATE______________
One further "Micra" online item, there apparently is a 401K trust set up, this link - asserting there exists a trust for funding arrangements and benefits arrangements, Craig Benson identified as annual reporting agent "Administrator."

______________FURTHER UPDATE_____________
The Internet Archive has Micra entries; e.g., this screenshot:

click to enlarge and read

____________FURTHER UPDATE______________
Why the detail? Because it bothers me to see people opposed to student debt relief in a half million dollar home and running a business aground, while thinking themselves smart enough to meddle in family decision making of others, a woman and her doctor.

It galls, bankruptcy relief for splatting a business, but none for students under water with debt or people with a back breaking medical bill that is harder to scrub by a bankruptcy. Those having such little care for the plight of others should not expect kind feelings toward their plight, given that we are all in it together until we croak, and some work the system causing others to suffer.

Next - If instituting a trade war had any impact whatsoever in the business failure, the trade war was not started by Democrats, and large corporations will prosper while small operations tumble. That pattern is not good for our nation. Meaning Republicans should reconsider who they are and what policies are important in the lives of citizens and immigrants - who are as human as they are with identical basic needs. May it be a learning experience generating more temperate and cordial feelings for others less well off to be unable to get into a business to steer it well or otherwise. Unable to get gambling money from the SBA.

_________________________________
please note technical error wiped out part of this post which had to be reconstructed. if errors in linking, grammar, or other post aspects now exist, multiple proof reading effort was needed in the hope of minimizing error.