C_Dale goes chap 11

Discussion in 'Mountain Bikes' started by Slacker, Jan 27, 2003.

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  1. Slacker

    Slacker Guest

    As if we weren'texpect it.

    < snipped from http://www.bicycleretailer.com/bicycleretailer/index.jsp >

    JANUARY 27, 2003 -- BETHEL, CT (BRAIN)--Cannondale officials will file a petition Tuesday Jan. 28 to
    reorganize under Chapter 11 of the U.S. bankruptcy code. The plan is subject to bankruptcy court
    approval, which is expected to come shortly after the filing is made.

    As part of the plan, Pegasus Partners, one of Cannondale's creditors, will acquire all the bike
    and motorcycle maker's assets, including intellectual property, manufacturing facilities,
    inventory and subsidiaries in Japan, Australia and the Netherlands. Pegasus lent the company $25
    million last summer.

    Cannondale and its lenders continue, however, to look for buyers for either or both of the
    businesses.

    Pegasus' acquisition is pursuant to Section 363 of the bankruptcy code, and subject to court
    approval. The acquisition is essentially a stalking-horse move. Another company, or companies, could
    make a higher offer and acquire the company.

    Until that time, however, Pegasus plans to run the bicycle business with the current management
    team. Most of Cannondale's upper management, including its vice presidents, plan to stick around.
    All declined the retention bonuses Pegasus offered them to stay. Accepting the money would have
    meant deeper cuts in staff.

    Bill Luca, Cannondale's vice president of finance, is one executive who will not stick with the
    company. He resigned from the Cannondale last week. His replacement will be named once the company's
    plan for reorganization is approved.

    Pegasus and CIT/Business Credit, the company's other lender, will provide the company with financing
    to fund operations, allowing it to meet financial commitments to its suppliers and employees, as
    well as to pay vendors for goods and services received after the filing.

    Despite reports to the contrary, Cannondale did not lock the doors on its bike factory last week.
    "We never stopped shipping bikes we had in stock," said Scott Montgomery, Cannondale's vice
    president of marketing. "Our vendors have been working with us. We never stopped dealer service,
    warranty, spare parts or any aspect of service."

    The company stopped building new bikes, however, after it furloughed 500 factory workers in
    late December.

    Though Cannondale will resume bike production after the courts approve its plan for reorganization,
    motorcycle production has been shut down, pending a potential sale. The company has been trying to
    sell the motorsports for months.

    "The motorsports division was threatening the bicycle division," said Joe Montgomery Cannondale's
    founder and president.

    "Although we believe in the value of our motorsports products, we didn't have sufficient financial
    resources to make the additional investments necessary. We look forward to bringing a renewed
    focus to our bicycle business and to working through this challenge with the greatest possible
    speed," he added.

    Workers furloughed from the motorsports factory in December will not be recalled. Furloughed workers
    at the bicycle factory, however, are scheduled to return to work as soon as the plan for
    reorganization receives approval.

    Cannondale's foreign subsidiaries aren't included in the filing, but are part of Pegasus'
    acquisition. The subsidiaries accounted for approximately 42 percent of the company

    --
    --
    Slacker
     
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  2. Bill Wheeler

    Bill Wheeler Guest

    On Tue, 28 Jan 2003 03:51:30 GMT, "Slacker" <[email protected]> wrote:

    [snip]

    It was so funny today going into one of my LBS (major C-dale shop). I asked them about it and
    they told me

    "We can't comment"

    I guess they can now,

    Bill The mind serves properly as a window glass rather than as a reflector, that is, the mind should
    give an immediate view instead of an interpretation of the world.
    :-]
     
  3. Bob

    Bob Guest

    My LBS said it wasn't true and that it was the usual winter furlough bit. I wonder if they still
    believe that? bob "Bill Wheeler" <[email protected]> wrote in message
    news:[email protected]...
    > On Tue, 28 Jan 2003 03:51:30 GMT, "Slacker"
    >
    > [snip]
    >
    > It was so funny today going into one of my LBS (major C-dale shop). I asked them about it and
    > they told me
    >
    > "We can't comment"
    >
    > I guess they can now,
    >
    > Bill The mind serves properly as a window glass rather than as a reflector, that is, the mind
    > should give an immediate view instead of an interpretation of the world.
    > :-]
     
  4. Dave

    Dave Guest

    Moto's, ya gotta hate em' right? (or at leave it to those who do them well..)

    "Slacker" <[email protected]> wrote in message
    news:[email protected]...
    > As if we weren'texpect it.
    >
    >
    > < snipped from http://www.bicycleretailer.com/bicycleretailer/index.jsp >
    >
    > JANUARY 27, 2003 -- BETHEL, CT (BRAIN)--Cannondale officials will file a
    petition Tuesday Jan. 28 to reorganize under Chapter 11 of
    > the U.S. bankruptcy code. The plan is subject to bankruptcy court
    approval, which is expected to come shortly after the filing is
    > made.
    >
    > As part of the plan, Pegasus Partners, one of Cannondale's creditors, will
    acquire all the bike and motorcycle maker's assets,
    > including intellectual property, manufacturing facilities, inventory and
    subsidiaries in Japan, Australia and the Netherlands.
    > Pegasus lent the company $25 million last summer.
    >
    > Cannondale and its lenders continue, however, to look for buyers for
    either or both of the businesses.
    >
    > Pegasus' acquisition is pursuant to Section 363 of the bankruptcy code,
    and subject to court approval. The acquisition is
    > essentially a stalking-horse move. Another company, or companies, could
    make a higher offer and acquire the company.
    >
    > Until that time, however, Pegasus plans to run the bicycle business with
    the current management team. Most of Cannondale's upper
    > management, including its vice presidents, plan to stick around. All
    declined the retention bonuses Pegasus offered them to stay.
    > Accepting the money would have meant deeper cuts in staff.
    >
    > Bill Luca, Cannondale's vice president of finance, is one executive who
    will not stick with the company. He resigned from the
    > Cannondale last week. His replacement will be named once the company's
    plan for reorganization is approved.
    >
    > Pegasus and CIT/Business Credit, the company's other lender, will provide
    the company with financing to fund operations, allowing it
    > to meet financial commitments to its suppliers and employees, as well as
    to pay vendors for goods and services received after the
    > filing.
    >
    > Despite reports to the contrary, Cannondale did not lock the doors on its
    bike factory last week. "We never stopped shipping bikes
    > we had in stock," said Scott Montgomery, Cannondale's vice president of
    marketing. "Our vendors have been working with us. We never
    > stopped dealer service, warranty, spare parts or any aspect of service."
    >
    > The company stopped building new bikes, however, after it furloughed 500
    factory workers in late December.
    >
    > Though Cannondale will resume bike production after the courts approve its
    plan for reorganization, motorcycle production has been
    > shut down, pending a potential sale. The company has been trying to sell
    the motorsports for months.
    >
    > "The motorsports division was threatening the bicycle division," said Joe
    Montgomery Cannondale's founder and president.
    >
    > "Although we believe in the value of our motorsports products, we didn't
    have sufficient financial resources to make the additional
    > investments necessary. We look forward to bringing a renewed focus to our
    bicycle business and to working through this challenge
    > with the greatest possible speed," he added.
    >
    > Workers furloughed from the motorsports factory in December will not be
    recalled. Furloughed workers at the bicycle factory,
    > however, are scheduled to return to work as soon as the plan for
    reorganization receives approval.
    >
    > Cannondale's foreign subsidiaries aren't included in the filing, but are
    part of Pegasus' acquisition. The subsidiaries accounted
    > for approximately 42 percent of the company
    >
    > --
    > --
    > Slacker
     
  5. Mark Hickey

    Mark Hickey Guest

    "Bob" <[email protected]> wrote:

    >My LBS said it wasn't true and that it was the usual winter furlough bit. I wonder if they still
    >believe that?

    Why not? They probably believe steel frames get soft and spokes wear out... ;-)

    Mark Hickey Habanero Cycles http://www.habcycles.com Home of the $695 ti frame
     
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