MUKWONAGO, Wis. (BRAIN) — A liquidator is auctioning the remaining assets of Fuell Inc., an e-bike and e-motorcycle brand founded by motorcycle innovator Erik Buell that entered Chapter 7 bankruptcy last October.
Fuell held several crowdfunding campaigns while in business, including one that raised nearly $1.5 million on Indiegogo to launch its Flluid 2 and Flluid 3 e-bikes.
Earlier this year, a handful of disappointed crowdfund backers objected to the bankruptcy trustee’s plan to abandon Fuell assets, including e-bikes, at warehouses in France and Iowa. The trustee told the court that paying to warehouse the assets cost more than they were worth, but some crowdfunderes filed objections to the plan, saying the assets should be auctioned or given or sold to them.
“I will drive to Iowa to claim the electric bicycle, trunk bag and chain lock on the list (of assets) that I paid for in full,” read one handwritten objection sent to the court by an Illinois consumer.
In the end, a Wisconsin bankruptcy judge approved auctioning all assets and abandoning only those that don’t sell. Abandoned assets revert to the debtor and are no longer considered assets in the Chapter 7 proceedings.
The court’s order approving the auction sets a tiered system for its proceeds, first paying the auction house, landlords, and the bankruptcy trustee (for insurance), with remaining proceeds going to pay the full balance of secured debt owed to Franklin Capital Holdings, about $479,000. Once the Franklin debt is paid in full, remaining proceeds go to the bankruptcy estate to be distributed to unsecured creditors, including the crowdfund backers, suppliers, former employees and others.
The company notified customers last October that Fuell was being liquidated and that unless a buyer came along to re-establish the brand and deliver e-bikes to the campaign backers, they would likely not receive a refund or a bike. Supporters were advised to file claims with the bankruptcy court. “If you have placed a deposit for the purchase of a product, your claim may be entitled to priority to an extent. You may want to consult with a lawyer on this issue,” Fuell’s bankruptcy attorney told creditors in an Oct. 17, 2024, letter.
After the court approved the auction earlier this week, liquidator Heritage Global Partners announced the online auction will begin Aug. 13. The assets include design patents, trademarks and other intellectual property, e-bikes, electric motorcycles, e-bike components, bike tools and other factory and office equipment. The assets are in Mukwonago, Wisconsin, Ames, Iowa, and Tennessee.
In its initial filing, Fuell told the court its assets included $1.8 million in unassembled parts and inventory, plus other assets it estimated were worth about $500,000. Its secured liabilities totaled $785,490 while unsecured liabilities totaled $5.8 million. The unsecured creditors list includes Cycle Source Logistics of Ames, Iowa, an industry 3PL and logistics provider.
The auction website is at bid.hgpauction.com.
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Crowdfund backers objected to a plan to abandon some e-bikes.
