The Walworth County (Wisconsin) Circuit Court has approved the sale of Erik Buell Racing (EBR) to Liquid Asset Partners–the same liquidation company that dismantled and sold off Buell assets in 2009-2010–for $2 million, according to a report published today by Milwaukee’s Journal Sentinel.
Read the full report here: http://www.jsonline.com/business/new-owner-of-erik…
EBR sought court protection from creditors, entered Receivership (similar to bankruptcy) and shut down its motorcycle manufacturing and engineering operations in April of 2015. The court-appointed Receiver then set up an auction to sell off the assets of EBR to help creditors and former employees recoup money owed to them.
On August 5, 2015, Atlantic Metals Group, LLC, a New Jersey-based business owned by motorcycle enthusiast Bruce Belfer, was declared the winner of the auction with a bid of $2.25 million. That bid was to buy the motorcycle inventory, parts inventory, tooling, machinery and other manufacturing assets of EBR.
In an interview with Roadracing World, Belfer said he planned to re-open EBR and resume production of EBR motorcycles with Erik Buell having a significant role in the company.
Prior to the auction, the Receiver entered into a Settlement Agreement with Hero MotoCorp, a 49% minority owner in EBR, in which Hero MotoCorp purchased for $2.8 million the engineering work it contracted EBR to do on small-displacement Hero motorcycles.
“The Receiver has been advised that the Buyer [Atlantic Metals Group] is ready, willing and able to close on the purchase of the Assets with no contingencies whatsoever, other than approval of the proposed sale by this Court and obtaining free and clear title to the Assets,” read court documents released on August 6, 2015.
Atlantic Metals Group, however, was apparently unable to obtain “free and clear title to the Assets” preventing it from securing the financing it needed to close the sale and capitalize the business, according to a Journal Sentinel article.
Belfer said his deadline to close the deal was September 30, 2015, but Hero had a right to claim against the inventory until October 6, 2015, resulting in an uncertain balance sheet that prevented him from securing financing.
This resulted in EBR going back up for auction December 10, 2015. That auction was won by Liquid Asset Partners, but the court refused to approve that sale because it felt “opponents of the deal did not have enough time to submit objections,” according to the Journal Sentinel.
A hearing on the December 10, 2015, auction was scheduled for January 14, 2016, but in the interim a new auction was held on January 13. Liquid Asset Partners’ bid of $2 million won that auction, and today the court approved the sale.
Today’s article in the Journal Sentinel quoted Liquid Asset Partners President Bill Melvin as saying his company is willing to work with other entities to restore EBR as a motorcycle manufacturing operation. But according to Liquid Asset Partners’ website, www.liquidap.com, the company specializes in “Liquidations, Auctions & Appraisals – Having worked with companies such as Circuit City, Buell, Meijer, Harley-Davidson Motor Company, K-Mart, Indian Motorcycles, Kroger, GE, JP Morgan, and Wells Fargo, we know that we can liquidate your assets in a timely manner in the United States and internationally.”