SAN JOSE, CA (BRAIN)—Bike Spring Bicycle Shop, a Specialized concept store, has filed for bankruptcy so that the owner can reorganize his operations.
Paul Wassem, the store’s owner, said a dispute with Specialized over $622,000 in debt, followed by the termination of his dealer agreement spurred his voluntary petition for Chapter 11 protection.
Wassem opened Bike Spring in July 2006 as a 5,300-square-foot Specialized concept store, using a $50,000 loan from Specialized to help build it.
Specialized cancelled its dealer agreement in May after a disagreement over the terms under which Wassem was to repay outstanding invoices.
John Thompson, national sales manager for Specialized, said, “Starting in January of this year we began working with the dealer to get paid on a large receivable. We received numerous promises of payment over the course of several months, which were not fulfilled.
“We had no choice but to file suit. The owner then filed for bankruptcy, and we will likely not be able to collect for product previously sold. I should have acted much sooner,” he added.
Wassem said Bike Spring offered terms to address the alleged default but Specialized chose not to accept them.
“The only dispute involves accounts payable to Specialized. No other contractual obligations are in question,” Wassem said.
“Bike Spring believed the terms of its agreement with Specialized included a dispute resolution provision and a period of time to cure any default, but Specialized disagreed.” —Megan Tompkins