City attorney recommends nearly $1 million settlement with Silk

Case has lasted more than five years

Silk Strip Club Milwaukee Common council
Silk Exotic recently wanted to open a strip club at 804 N. Milwaukee St.

Last updated on July 3rd, 2019 at 07:14 pm

After spending more than five years in court, the Milwaukee city attorney’s office is asking the Common Council to approve a settlement with the owners of Silk Exotic Gentlemen’s Club for nearly $1 million.

Silk Strip Club Milwaukee Common council
Silk Exotic recently wanted to open a strip club at 804 N. Milwaukee St. in downtown Milwaukee.

Six Star Holdings, LLC and Ferol, LLC, the entities formed by Silk owner Jon Ferraro and his partners, have been unsuccessfully attempting to open a strip club in downtown Milwaukee and in Walker’s Point and sued the city after repeatedly being denied a license.

In October 2015, U.S. District Judge Lynn Adelman ordered the city to pay Silk Exotic $482,586 to cover attorney fees and out-of-pocket expenses. In February 2015, a jury awarded Silk $435,500 in federal court for revenue lost because the city would not grant the company a license for a downtown strip club.

Attorneys representing the city and Silk’s attorney, Jeff Olson, of the Madison-based Jeff Scott Olson Law Firm, met May 26, and reached a settlement of $968,331.75.

Olson would not comment on whether the settlement would stop Silk from applying for another license in downtown Milwaukee.

He said the settlement would not set a precedent for other strip clubs wanting to open downtown.

“We’re avoiding a court decision, court decisions set precedent,” Olson said, adding that he would not comment further until the city approved the settlement.

If the Common Council approves the city attorney’s recommendation, the settlement will be paid for by using the council’s 2016 contingent fund. The matter will be introduced to the council’s Finance and Personnel Committee next month.

“Should the city continue to litigate the attorney’s fee award, attorney’s fees will simply grow,” said a letter submitted by the city attorney’s office. “There is not a reasonable likelihood of success for continued appeal of the fee award.”

The city is also facing another lawsuit from a second group wanting to open a strip club at 730 N. Old World Third St. Boardroom Entertainment MKE, LLC, filed a lawsuit in February, after being denied a license. Dusanka Buzdum, whose family owns the property, lost her license in January 2015, when Milwaukee police found dancers wearing pasties and bikini bottoms dancing at her bar, Rusty’s Old 50. She was denied a license in September. Other family members have applied for licenses and also been denied.

Assistant City Attorney Adam Stephens, said the Silk settlement would have no effect on the Buzdum case. That case is still in the early stages of pretrial discovery, Stephens said.

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