Attorney will change course to help struggling businesses

After July 1, there will be one less attorney fighting banks that go to court to recover property securing failed loans.

Jerrold Wanek, 53, who has been in the thick of the legal turmoil generated by the collapse of real estate markets in 2007 and 2008, will close his law firm on that date to focus on salvaging homegrown Iowa businesses.

“The recession did two things,” Wanek said. “It kept me busy enough that I can afford to retire, and it burned me out. I did 12 years’ worth of work in five years.”

His courtroom maneuvering on behalf of some of Greater Des Moines’ best- known developers might have worn down more than a few bank attorneys, not to mention a judge now and then.

As Wanek has said, he “wasn’t afraid to swing for the fences.”

From his point of view, it was done for the benefit of the Klines and Walterses and Stanbroughs who came to his office seeking relief from creditors who were chasing them through state courts and, in some cases, seeking the shelter of bankruptcy court.

Wanek has practiced law for more than 30 years. He was drawn to bankruptcies soon after entering practice in the 1980s when a national company needed a local Iowa attorney to represent it in a bankruptcy.

He will spend the next several months attempting to clear out pending cases. He will not take new cases.

When he closes the practice, Wanek hopes to help companies that are on the ropes but have a chance to get back on their feet.

“I want to help those small Iowa companies that are struggling to survive,” he said.

Wanek can run off a list of what he considers state treasures that have closed – companies such as Monroe Table in Colfax, which manufactured folding tables that “were in virtually every church in Iowa at one time.”

“I’m sure there are more than what I’m aware of,” he said. “Maybe the things that I have learned over the years can help them out.”

Attorney Steve Wandro agreed that guiding clients – contractors, developers, subcontractors – through tough times is a withering experience.

“(Wanek) was the most aggressive and creative in defending developers and homeowners against the industry,” he said. “It’s a tough practice, and it takes its toll.”

Drop in bankruptcies indicates business failures might have reached bottom

Business and personal bankruptcies dropped last year, providing an indication that the financial anguish caused by the Great Recession has bottomed out.

“I think the volume is slowing down,” said attorney Jerrold Wanek, a bankruptcy specialist who represents businesses that clash with lenders. “The people who were able to hang on and who had more resources are starting to fall, and that usually means we’re near the end.

“The same thing happened during the farm crisis. The small farmers and the farmers who were just starting out went right way. The older farmers hung on until 1988 or 1989.”

Attorney Steve Wandro typically is sitting across the table from bankers and their lawyers, representing developers or contractors who need to work out a problematic loan.

In the last six months of the year, he noticed that lenders were more willing to redraft the terms of a loan.

“We’re not hearing the fat ‘nos’ that we heard earlier in the crisis,” he said.

Interest rates have fallen, and appraisals are reflecting lower values for properties used to secure loans, he said.

Wandro, who represented former Regency principal James Myers in his $183 bankruptcy filing and who recently filed what could be a record $457 million bankruptcy for developer Jon Garnaas, said that prior to changes in bankruptcy law in 2005, lenders were compelled to modify mortgages to the actual value of a property.

The effect of those and other changes was dramatic. Iowa bankruptcies dropped to 3,013 in 2006 from 11,205 in 2005, when filings spiked 41 percent in anticipation of the changes. There were 7,904 filings in 2004.

Last year in Polk County, all bankruptcy filings had dropped to 1,483 as of Dec. 23 from 2,029 for all of 2010. Business bankruptcies had dropped to 188 from 221.

Kurt Mumm, president of NAI Ruhl & Ruhl Commercial Co. in Des Moines, agreed that the rate of foreclosures could have reached bottom.

“I don’t know whether we are going to go much lower, but it will be a period of time before we see any increases in the market,” he said. “There is no quick turnaround in real estate.”