CENTRAL ISLIP, NY (BRAIN)—An attorney for Iron Horse Bicycle Company filed a motion last week initiating the process for the sale of the bankrupt bicycle business to Outdoor Cycle Group, a company owned in part by the Randall Scott, son of Iron Horse president Cliff Weidberg.
If the judge approves the motion, a sale hearing and auction date would be set to consider the offer from Outdoor Cycle Group, as well as any other offers that may come forward, according to the 21-page motion filed May 20 by Andrew Thaler.
The purchase would be for the Iron Horse IP assets including the trademark, trade names and patents, and all other assets owned by the company including customer lists, Web sites and inventory of Iron Horse and non-Iron Horse branded bikes.
The license agreements for K2, Columbia and Jeep bikes previously held by Iron Horse’s parent company, World Wide Cycle Supply, are now held by East Coast Cycle Supply, a company formed by former Iron Horse employees.
Outdoor Cycle Group has offered $2 million for the brand plus a percentage of the royalties it receives from licensing the Iron Horse trademark over the next five years.
Iron Horse has been searching for a buyer since late last year when the financial condition of the company began to deteriorate. Dick’s Sporting Goods, Sports Authority, Wal-mart, Forzani, Performance Inc. and Dorel Industries all showed interest in the company, but none of those deals materialized. Other potential deals to sell the company to Jeff Bruno, the president of East Coast Cycle Supply, and Randall Scott also fell through.
Outdoor Cycle is based in Boulder, Colorado, and is in the business of Internet and direct bicycle sales, according to court documents. Randall Scott also owns RS Cycle, another online retail store that has been the primary seller of Iron Horse bikes for nearly a year. RS Cycle has continued to liquidate Iron Horse bikes online since the company filed bankruptcy in early March at the behest of Iron Horse’s unsecured creditors who believe there is a more profitable avenue in which to sell the inventory.
Those creditors, many of whom are Asian suppliers out millions of dollars to Iron Horse, have requested a trustee be named to the case to oversee the bankruptcy, which would require Iron Horse stop selling its inventory.
Thaler and an attorney for Iron Horse’s secured lender, CIT Group, have filed objections against that request.
In Thaler’s recent motion, he argues that the most viable option is to sell the company immediately while demand for bikes is high in order to “preserve the Iron Horse brand name and inventory’s value.”
The judge has not yet responded to Thaler’s motion.