Erik Buell Racing Shuts Down - 2015

[ray_ray]

Too bad and twenty MIL in reverse is beyond me and at the same time I have a feeling this guy is not finished yet .. EB sounds like a business man in his statement below... CHPT 128? Might be as good of a business way out as any?

Below the pic, it says he was with Hero, Indias' biggest motorcycle company. I know zero on Hero, but all the other bikes I see made by these companies is about all 70s\80s air cooled techno... Those bikes are not in the 40K $ hemisphere ...

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For the second time in less than a decade, an Erik Buell motorcycle company is closing its doors. Erik Buell Racing (EBR), the successor to the defunct Buell Motorcycle Company (BMC), reportedly owes more than $20 million and was forced to shut down and let its 126 employees go.


Based in East Troy, Wisc., EBR opened in 2009 after Harley-Davidson ended its 26-year subsidiary partnership with BMC (Buell is a former H-D engineer, for those who don’t know). EBR set out with high hopes, aiming straight for the most competitive racing motorcycles and launching with the 1190RR. It then put out its first street bike, the $40,000 1190RS (1,190cc) for the 2012 model year for a limited run and eventually built the 1190RX as its first production bike in 2013.




“The turn we recently took, after we thought we were moving forward, was unexpected,” Erik Buell said in a statement. “We thought we had secured funding, but in the end, we were not able to get the funding in place. Therefore we need to do the best we can under the circumstances for all parties in interest.”

According to the Milwaukee Journal-Sentinal, EBR filed for Chapter 128, a voluntary debt consolidation alternative to bankruptcy. This comes after India’s biggest motorcycle company Hero purchased a 49 percent stake in EBR for $25 million just two years ago.

 

[LandofMotards]

Their racing program is still going to finish the season. Larry Pegram said that while it was an unexpected announcement Hero is still full on with their sponsorship.

I'd imagine it's hard to compete with ducati, bmw, and mv at those prices. When people finally have that kind of money to spend they've already been dreaming of what they would get for a long time. Ebr hasn't been around long enough to be on their list

 

[Motosportz]

Sad once again. Odd too as I just read a long interview with him and the owner of Hero and they had all these plans and hero used a lot of Erics ideas. Wonder if he will stay on at Hero as a design consultant type gig?

 

[Bigbill]

Too bad the concept was right on. But to compete with the rockets from Japan and the bikes from Europe the competition is tough.

Harley is getting a lot of feedback from them drag racing. On how to build a better quality bike. With the new Indian motorcycle company running up to its potential the sales are up predicting it may surpass Harley.

It's a tough market in cruiser sales. Every motorcycle manufacturer has a piece of the market now even bmw.

 

[ray_ray]

Sounds like a business decision to me ...You know, the stuff that is conducted behind closed doors and unless you are seated at that table, the best you will ever get is hear-say after the event has happened ... Maybe EB will write a book some day? This was EB first attempt after leaving HD?

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“The turn we recently took, after we thought we were moving forward, was unexpected,” Erik Buell said in a statement. “We thought we had secured funding, but in the end, we were not able to get the funding in place. Therefore we need to do the best we can under the circumstances for all parties in interest.”

For all you young guys out there, the above statement is about as pure business and smooth as possible ... Unless, maybe, you are someone that got laid off and have a different view point. Employees have a contract also? No mention of employees below ... This is the business side of the equation, not the cool riding-a-EB-racer side. This side is almost always first and usually last seen, for almost any business. This is the adult side. The side where BS walks and $ talks. The side not talked about too much in the open .. The side we all learn about later, as needed, when we are given the business .. You want a very responsible person here running the show you are part of.

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About Chapter 128


WHAT IS CHAPTER 128?
Chapter 128 is a voluntary debt consolidation plan through the Wisconsin Circuit Court system. It is not a consumer credit counseling plan and it is not bankruptcy.

CHAPTER 128 vs. BANKRUPTCY
There are two major differences: Bankruptcy is Federal. Chapter 128 is strictly a State of Wisconsin plan. Also, Chapter 128 is the opposite of bankruptcy: you are repaying the debts.

ABOUT THE NEW BANKRUPTCY LAWS:
The Federal Government overhauled the bankruptcy laws, which went into effect October 17, 2005, making it much more difficult to file bankruptcy. This does not effect Chapter 128 proceedings and in fact may make it a much more attractive option to debtors: if you do not qualify for bankruptcy, you may be able to file a Chapter 128 instead.

The following is a partial list of the advantages of a Chapter 128:

• Is unique to the State of Wisconsin and is open to all Wisconsin residents.
• Unlike bankruptcy, you are not required to list assets and property not in jeopardy.
• You do not need to list all the debts you owe, unlike bankruptcy.
• A very attractive alternative if you do not qualify under the new bankruptcy laws.
• Stops garnishments.
• Debt gets repaid.
• Not listed in newspapers.
• Interest on debts is uncollectible upon successful completion of the Chapter 128.
• Easy and inexpensive to file.
• May file more than once.
• No Court appearances.

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That's the rubber hitting the road part ... The line in blue and the 2nd, 3rd, 6th, and 7th bullet-points are a little interesting and sort of gets a little shady but I'm no lawyer for good reason.


I gotta add this ... You are repaying the debit with this chapter ... Little interesting as the first move by most any business to save money is to fire all the employees to lower operating costs, as EB did here. The businees question is, how is he gonna repay all that money?

 

[ray_ray]

Here's another aspect of this Chapter ..

WHAT DEBTS CAN I INCLUDE?
Generally, medical bills, credit cards, check cashing stores, personal loans (without co-signers) and most other miscellaneous bills may be included.

WHAT DEBTS CANNOT BE INCLUDED?
Debts with collateral cannot be included, which includes car/motorcycle loans, and mortgages. Co-signed loans, taxes, child support, and student loans may not be included. A recent court order has declared that filing a Chapter 128 alone does not stop a utility company from disconnecting service and it does not require a utility company to reconnect service.

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Again no sht-house lawyer here, but that certainly sounds like all the monies here were not backed by anything but a signature ... Sounds cozy at least ... EB might end up chewed up and hung-out to dry before this is over ... Some one correct me here please, but it sounds like EB is 100% responsible for the original loan, and now, he is 100% responsible for whatever this chapter calls for ...

 

[LandofMotards]

So Hero owning 49 percent of the shares in EBR means they are not included in debt but soley EBR?

 

[ray_ray]

That question would be beyond my scope but I do understand the terms collateral and co-signer as applied here.

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From where I sit now, this chapter sounds like an easier-out for many that somehow owe too-much money but want to repay what they owe now and limit any financial BS that goes along with a full bankrupt claim ...


Q: What will my monthly payments be?
A: The rule of thumb is that there is about a $300 monthly payment for every $10,000 of debt you want to include in your Ch-128 plan (which includes all attorney fees and trustee administration expenses which you also pay through your plan).

Three yrs to pay it off ... I'd guess the 2 parties in question here have that plan ... EB wings might be slightly clipped in the may-lay...

 

[ray_ray]

Here's a little more info on his dealings with Hero ..

The relationship with Hero began with engineering contracts in 2011 and produced several smaller-displacement models. In the same late-2013 interview, Buell said engineering contracts and consulting had become good business for the company and that he envisioned expansion in that area.

In October 2013, it was announced that EBR would be the distributor for Hero motorcycles in the US and Canada starting in summer of 2014. As of this time, however, there appears to be no distribution of Hero motorcycles in North America.

Though sales numbers are not known, the 1190RX superbike was subject to factory incentives of at least $2,000, indicating sales fell short of expectations. An insider said the SX was “doing much better.” Nonetheless, the initial investment in manufacturing and parts was unable to be recouped by sales, and hopes for more funding from Hero did not come to fruition.

 

[Huskynoobee]

Bummer....