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stillwelding
11/16/2017 6:01am
11/16/2017 6:01am
Edited Date/Time
11/24/2017 4:51am
Read the whole article for clarity, but here are some of the brands you'll recognize.
The companies filing for Chapter 11 are the following:
Renthal Americas, Tucker Rocky, Performance Machines (which includes Roland Sands Design), Vance & Hines, J&P Cycles, Velocity Holdings Company, Velocity Pooling Vehicle, DFR Acquisition, Ed Tucker Distributor, Kuryakyn, MAG Creative Group, MAGNET Force, Motorcycle Superstore, Motorcycle USA, Motorcycle Aftermarket Group, Mustang Motorcycle Products, Ralco Holdings, and Rally Holdings.
Chapter 11 filings give fairly large ranges of debt declaration once you get beyond the million dollar range, and there are several of MAG’s holdings filing in the $100 million to $500 million range.
However, taking the smallest amounts possible into account, the MAG companies are filing for a combined amount in excess of $872,650,000. This means that real figure is likely above the $1 billion mark.
By having these companies file for protection under Chapter 11, the new owners of MAG will be able to more rapidly turnaround the company’s overall business, and return to profitability.
https://www.asphaltandrubber.com/news/motorcycle-aftermarket-group-mag-chapter-11-refinance/
The companies filing for Chapter 11 are the following:
Renthal Americas, Tucker Rocky, Performance Machines (which includes Roland Sands Design), Vance & Hines, J&P Cycles, Velocity Holdings Company, Velocity Pooling Vehicle, DFR Acquisition, Ed Tucker Distributor, Kuryakyn, MAG Creative Group, MAGNET Force, Motorcycle Superstore, Motorcycle USA, Motorcycle Aftermarket Group, Mustang Motorcycle Products, Ralco Holdings, and Rally Holdings.
Chapter 11 filings give fairly large ranges of debt declaration once you get beyond the million dollar range, and there are several of MAG’s holdings filing in the $100 million to $500 million range.
However, taking the smallest amounts possible into account, the MAG companies are filing for a combined amount in excess of $872,650,000. This means that real figure is likely above the $1 billion mark.
By having these companies file for protection under Chapter 11, the new owners of MAG will be able to more rapidly turnaround the company’s overall business, and return to profitability.
https://www.asphaltandrubber.com/news/motorcycle-aftermarket-group-mag-chapter-11-refinance/
I thought this was going to be about MAGA.
The Shop
.
Pit Row
When I was a rep they bought White Bros/Alloy/Sunline/SixSixOne just so that they could get their hands on some pos Harley product line. Subsequently MAG killed the other brands with zero consideration for the inherent value or our book of business. MAG is representative of the type of Wall Street mentality that is killing this country. I hope that the brands that are part of their holding company are able to spin off and stand on their own legs.
They come in, knowing very little to nothing about the original company's vision that made them successful, and have accountants run the numbers to see how many employees can be eliminated. Once all of the existing knowledge (those employees) are gone and the numbers fail to match the bean counter projections they start selling off "unprofitable" parts of the business. When that doesn't make the numbers work, they cook the books long enough to sell to another investor group that consolidates the businesses even further. When that fails, they rinse and repeat until it finally ends up like this, in Chapter 11.
All it leaves behind is the destroyed employees who showed up every day with good intentions of making the company successful and building a better life for their families. We've been in this cycle since the mid-80's in the U.S. It makes the stock market climb so it won't stop.
In order to finance these companies through their bankruptcy proceedings, MAG has negotiated $135 million in what is called debtor-in-possession (DIP) financing.
DIP financing is money lent to a company pre-bankruptcy, and is typically used to continue normal business operations while the bankruptcy works its way through the legal system.
It should be noted that usually DIP loans like this are given with very strict provisions on how the money can be used. It is important to note too that DIP financing is debt that is senior to any other debt, that is to say, it must be paid back first during any refinancing or bankruptcy arrangement.
This is kind of like flunking out of college with a bunch of student debt, then running up a bunch of credit card debt to take a vacation to "find yourself".
A lot of changes for the worse are likely ahead for those that work for and deal with those companies.
While the investment groups might have altered the "vision" of the original companies, I don't know if you can assign 100% of the blame to just that. There was this nugget in that article also:
Asphalt & Rubber is predicting an industry contraction of roughly 7% for 2017 in the USA, which is noticeable after the relatively flat past years of 2015 and 2016.
This looks like a canary in the coal mine.
LOL I worked at Ed Tucker that became Tucker that became Tucker Rocky.
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