Global Motorsport Group In Bankruptcy Court Of Delaware

Today, GMS lawyers sent me the Notice Of Auction And Sales Hearing in the US Bankruptcy Court For The district Of Delaware. On January 31st, 2008 Global Motorsport Group Inc. and Custom Chrome Europe Ltd (together the seller) filed with the bankruptcy court their motion for order approving asset purchase agreement and authorizing the sale of assets of GMS and Custom Chrome Europe, authorizing the sale of assets free and clear of all liens, claims, encumbrances and interests etc. The bid of Dae-II has already been received and all other bids must be received on or before February 25, 2008 at 4.00 PM Eastern time. The bankruptcy court has scheduled a hearing for February 28, 2008 at 1.30 PM Eastern time to consider the relief requested in the sale motion and to confirm the result of any auction. All objections to any relief requested by the Sale Motion must be received in writing on or before February 22, 2008 at 4 PM Eastern time. 

11 Responses to “Global Motorsport Group In Bankruptcy Court Of Delaware”

  1. 1 vibes Feb 22nd, 2008 at 8:37 pm

    Sounds like one bad-ass garage sale may be in the future.

  2. 2 Curt! Feb 23rd, 2008 at 2:30 am

    The sale is fixed. They already agreed to liquidate to DAE-II then a judge blocked the sale because it wasn’t open to all bidders after a complaint from the executor. The chapter 11 will wipe out all debts Global Motorsports holds as I understand the action. I got my notice on Thursday. That gives me a whole 3 days to put together a multi-million dollar bid. If I was a prospective buyer there is no possibility of getting a bid together in that amount of time. DAE-II is the manufacturer of the Revtech line of products, so it really looks like Global is selling to themselves and wiping out all their debt in the process. It’s just my opinion, but it sure smells fishy to me. There is a 300k “no-deal” penalty if Global doesn’t sell to DAE-II and there is an additional 500k penalty if DAE-II loses the public bid. Both of these penalties are excessive and have drawn complaints from the Bankrupcy executor. There’s no doubt that DAE-II is Global Motorsports biggest creditor, but It would be interesting to see how the two companies share officers.
    It would also be interesting to see who is going to be left out in the cold on this deal.
    I’m sure there will be vendors hesitant to sell to the “new” Custom Chrome company.

  3. 3 Curt! Feb 23rd, 2008 at 2:34 am

    Here’s the news release I was referring to above.
    US Trustee Battles Global Motorsport
    Monday February 11, 1:51 pm ET
    US Trustee Opposes Global Motorsport Bid Protections

    WASHINGTON (AP) — The federal watchdog in Global Motorsport Group Inc.’s Chapter 11 case wants to block the company from offering what she called “inappropriate” protections to the leading bidder in a potential auction of the company’s assets.

    “The circumstances set forth are not all intended to promote a healthy auction process,” U.S. Trustee Kelly Beaudin Stapleton said in documents filed Friday in the U.S. Bankruptcy Court in Wilmington, Del.

    The bankruptcy court is set to consider whether to give Global Motorsport permission to auction off its assets on Monday.

    Global Motorsport, an international supplier of after-market parts and accessories for Harley-Davidson Inc. motorcycles, has a leading bid of $16 million lined up from Dae-II USA Inc. The company has proposed to pay Dae-II up to $300,000 in expense reimbursement, and if its bid loses at auction, a $500,000 break-up fee.

    Stapleton called the amount of the expense reimbursement “excessive” because the bankruptcy court usually grants reimbursements that are 1 percent of the purchase price, while Global Motorsport’s request for $300,000 is closer to 2 percent.

    Stapleton also took issue with the company’s request to make both payments “under a variety of circumstances,” including if the sale doesn’t close by March 12 or if the company decides to purse a plan of reorganization.

    She said Dae-II wouldn’t deserve the payments if an auction doesn’t occur because the bid wouldn’t have added any value to the bankruptcy estate. She asked that Global Motorsport’s request be changed to only allow the break-up fee if Dae-II’s bid loses at auction.

    Global Motorsport, which is based in Morgan Hill, Calif., filed for Chapter 11 protection on Jan. 31 after facing increased competition and slow growth. The company also cited a failed $85 million bond offering in 2004 as a cause of its distress.

  4. 4 ridesafe Feb 24th, 2008 at 6:16 pm

    Maybe once someone in this industry will get things straight. The buyer , Dae-IL USA, or whoever it may be after the sale date will assume and be responsible for over $7M in accounts payable most to trade vendors. So in short no trade vendors will come out on the short end of the stick by that it means vendors will get 100 cents on every dollar currently past due. Why do some of you who post only the negative about this . maybe if the facts werew read the post might be the positive things about this deal, guess that bad news always sells better than good news just the way it is, but for once try getting the facts correct. By the way try reading the Dae-IL USA/GMG asset purchase agreement before making negative and false statements about this deal.

    Ride Safe

  5. 5 Chop Net Feb 25th, 2008 at 12:51 pm

    The purpose of a bankruptcy filling is to protect a company from the creditors. I don’t think that the buyer of GMS is going to volunteer to pay the due bills of CCI. It’s called dreaming…

  6. 6 ridesafe Feb 25th, 2008 at 2:07 pm

    Again before you think what is going on and make these comments, and what is really going on read the Asset Purchase Agreement, and you will see the vendor payables list and the term of the agreement that calls for trade payables to be paid with in 90 days of the close of this deal. So you are the one who is miss informed and yes these past due invoice will be and must be paid as per the terms of the Asset Purchase Agreement. Why not take a few minutes and read it you might learn something. The bankruptcy filling will protect the new company, whoever it may be, going forward from the secured and un-secured debtors with the major debtor being Cerberus/Abelco themselves to the tune of about $130M give or take, has nothing to do with trade vendors who once again will get $100 cents on every dollar owed to them.

  7. 7 HDCHOP Feb 25th, 2008 at 3:01 pm

    The new company, whoever it will be, is better off paying all the vendors or they are going to have difficulties getting parts in their catalog.

  8. 8 ridesafe Feb 25th, 2008 at 5:14 pm

    Guess you get it and got it,. Paying the trade vendors every penny of their past due monies is not only in the Asseet Purchase Agreement filed with the courts, but equally important but absolutley necessay for the company going forward if there is to be a company going forward. Vendors will be and must be paid, period.

  9. 9 StuffChic Feb 29th, 2008 at 11:51 am

    There’s nothing that Custom Chrome and Motorcycle Stuff want to do more than get back in the game. Both companies were formed and grew successfully from the ground up many years ago. These companies have strong family roots, with some employees having been with em for more than 20 yrs – and STILL haven’t left for another job. There are many people in the industry pulling for both companies to succed once again – employees, dealers, vendors, and even some competitors!
    Everyone knows relationships with vendors and dealers is critical to success in the future. Ridesafe you are exactly right. They can’t and won’t slit their own throats just to get out of paying a bill.
    Be careful of what you read – just because it’s on the internet doesn’t mean it’s factual.
    Like Ridesafe said – educate yourself on the issue before you go talking about something based off of your own assumptions. Remember the old phrase about why it’s bad to assume…?

  10. 10 BigVenom Mar 26th, 2008 at 5:01 pm

    Looks like the Dae-il deal went through! check it out on their myspace site.

    I wish them a speedy recovery and hope they start kicking a$$ soon! With Nace Panzica on board as the CEO I can see this turning into a ground shaking wakeup call for the industry once again.


  11. 11 Rez Jun 2nd, 2008 at 2:51 pm

    I keep getting notices of bankrupcy , now I hesitate doing business with CCI . I haven’t had much luck with this company , they seem really pushy , have high min. purchases and not willing to help the little guy. I realize the business side of things , keeping active accounts , min. purchases , but if the little guy could get his foot in the door………. maybe that same little guy could become a BIG guy.

    Not every business is a multi-million dollar business……. but we all try. As a business owner of a couple different companies…. I’d like to find a few other good suppliers out ther any suggestions?
    Tucker Rocky has been amazing to deal with…… and is always willing to help out , is very supportive and makes dealing with them a real pleasure.


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Cyril Huze