Court grants contempt motion against Bangstad

A Wisconsin circuit court judge has granted a motion for contempt against Minocqua Brewing Company (MBC) owner Kirk Bangstad for failing to show up at a court-ordered hearing, and he must meet an array of conditions — including paying legal fees and costs and providing certain financial records — or spend 120 days in the Oneida County jail.

In April, Bangstad failed to show up at a supplemental examination at which he was to turn over financial records and undergo questioning about his finances. That proceeding was scheduled as part of a defamation case in which Bangstad was found by a jury to have defamed Lakeland Times publisher Gregg Walker and ordered to pay almost $760,000.

Bangstad’s failure to appear prompted Matthew Fernholz, Walker’s attorney, to file motions to find Bangstad in contempt, given that Bangstad was under a court order to attend. Circuit court judge Leon Stenz, who presided over the defamation jury trial, signed the contempt order on June 7.

To avoid jail, Stenz ordered Bangstad to pay $6,638.17 by June 23, which the court found to represent the reasonable costs and attorney’s fees incurred by the plaintiffs for Bangstad’s failure to appear at the supplemental examination. If Bangstad fails to meet the court deadline for the payment, he also faces a fine of $200 a day until he pays the full balance owed, including fines.

In addition, Stenz ordered Bangstad to appear for another scheduled supplemental examination before commissioner Patrick Finlan on June 26 and to bring with him all tax returns for Bangstad and MBC from 2019-2023, which show income earned.

Bangstad must also supply all documents identifying any checking, money market, mutual fund, escrow, brokerage or savings accounts that he or MBC have had any interest in since June 1, 2020, to the present. 

The court specified that “identify” shall mean to show the type of account, name and location of the bank or other institution, and account number. Bangstad must additionally submit all documents showing all transactions for those accounts identified from June 1, 2020, to the present.

What’s more, the court is requiring Bangstad to provide an inventory of all equipment owned by Bangstad or MBC from June 1, 2020, to the present, as well as title to any motor vehicles, airplanes, books, campers, snowmobiles, and recreational vehicles in which he or MBC has or had any interest any time since June 1, 2020, to the present.

Other documents Bangstad must supply are copies of any financial statements prepared for Bangstad or MBC since June 1, 2020, to the present, plus copies of all promissory notes or other documents evidencing any loan or obligation owed by Bangstad or MBC.

Bangstad must furnish any document evidencing or pertaining to Bangstad or MBC disposing of any asset worth more than $10,000 anytime since June 1, 2020, and copies of all documents demonstrating all loan applications completed by Bangstad or MBC since June 1, 2020.

The court ordered the MBC owner to provide all documents requested in the subpoenas issued to Bank of New Glarus, JP Morgan Chase Bank, and State Bank of Cross Plains, with the exception of copies of checks.

Finally, Stenz ordered, at the upcoming supplemental examination before Finlan, Bangstad may not invoke his Fifth Amendment right against self-incrimination, unless he states that he is doing so upon the advice of counsel to avoid incriminating himself.

If Bangstad fails to comply with any term in the order, Stenz’s order states that he shall serve 120 days in the Oneida County jail.

The initial hearing

At the April hearing that prompted the contempt motion and order, Finlan opened the proceedings by noting that Bangstad did not intend to appear, though he had volunteered to attend by Zoom or telephone. However, Fernholz did not waive the personal appearance, which was required under the court order.

In his affidavit before the court requesting a finding of contempt and a warrant for Bangstad’s arrest, Fernholz observed that he had requested Bangstad’s appearance pursuant to the judgment against Bangstad of $759,422.61 and against MBC in the amount of $329,422.61 and that the court had signed the orders, which were sent to Bangstad’s attorney, Frederick Melms (no association with Melms, Hogan & Francois law firm in Minocqua). 

The hearing was originally scheduled for March 25, Fernholz stated in an affidavit, but Melms requested a new date, and the parties agreed to April 10. Melms also filed a motion to quash the order for Bangstad to appear at the supplemental examination.

The court subsequently ordered Bangstad and MBC to appear and to bring with them requested financial documents. 

“At no time prior to April 10 did attorney Melms inform me that Mr. Bangstad would not be appearing at the supplemental examination,” Fernholz wrote in his April 17 affidavit. “In fact, Mr. Bangstad lamented on Facebook that this court ordered him to appear for the supplemental exam.”

Similarly, Fernholz wrote, at no point prior to April 10 did Melms ever contact Fernholz to inform him that the date posed a conflict for Bangstad, the affidavit stated.

“Attorney Finlan’s office is 230 miles away from my home, so I left early in the morning of April 10,” the affidavit stated. “I arrived at his office around 12:30 p.m. I observed attorney Melms arrive at around 12:45 p.m. He then went into a separate conference room.”

Not only did Bangstad not show up, but Bangstad also did not produce all the documentation the court had ordered. Shortly before 1 p.m., the affidavit states, Melms entered the room where the supplemental examination was to take place and handed Fernholz a small stack of papers. 

“I asked him if this was everything that was ordered to be produced by this court’s order, and he replied it was not, and then commented ‘this was better than what I thought you would get,’” the affidavit stated. 

At the hearing, Melms conceded that the request for Bangstad’s tax returns from 2019-2023 was not satisfied, that Melms “did not know” if the request for “any checking, money market, mutual fund, escrow, brokerage or savings accounts” was complete, and that redactions made at Bangstad’s request to transactions from the foregoing accounts were not compliant.

A request for inventory of his business was “as compliant as his, sort of organization system, would allow him to be,” Melms said at the hearing, according to the affidavit. The affidavit cited other alleged deficiencies in the documents. 

“In short, attorney Melms appeared at the supplemental examination on April 10 with documentation that was insufficient or incomplete as to seven of the requests in the supplemental exam orders (for both Mr. Bangstad and the Minocqua Brewing Company),” the affidavit states.

Because of the motion to quash Bangstad’s mandated appearance at the hearing, which was denied, as well as Bangstad’s own complaint on Facebook that he had to appear before the court — and the significant time and expense incurred by the parties — Fernholz asked that an arrest warrant be issued to compel Bangstad to appear before the court and explain why he failed to appear at the hearing, and he also asked for a finding of contempt.

No arrest warrant was issued, but a contempt hearing was held on May 23, with Stenz signing the contempt order on June 7.

Richard Moore is the author of “Dark State” and may be reached at richardd3d.substack.com.