Buell motorcycles may be down for the count this time
Posted by Ben Baker on Dec 21st 2016
| When Erik Buell Racing shut down, it left more than a few riders wondering about the company and the fate of the bikes. |
| The most recent auction attempt, held in mid-December, saw no one step up with a bid to buy the company and restart the production lines. Another company, Liquid Asset Partners LLC, offered $1.6 million before the court-ordered auction. Liquid planned to sell off Erik Buell piecemeal. |
| Walworth County Circuit Judge Phillip Koss rejected the offer. He reasoned people who might object to the sale to Liquid Assets didn’t have enough time to marshal arguments. Erik Buell Racing shut down in April and began a state-version of bankruptcy, hence the circuit judge’s involvement. |
| Erik Buell himself objected to the sale, but exactly what he could do about it as not answered. Buell has not returned calls for comment. |
| A Louisiana man, Demetri Melekos, also objected. Melekos wants to buy the company, but on a reduced scaled. Melekos runs US Heritage Powersports. |
| Another hearing is set for Jan. 14. There are some 850 creditors in the case who are looking to get at least some of their money back. |
| A ZOMBIE COMPANY? |
| Despite the company’s apparent closure, Eric Buell Racing remained a live website. The website also continued to promote the 1190SX as a current production bike. A live website for a dead company? |
| Maybe not. |
| For his part, Mr. Buell said he’s ready to make a third, yes third, entry into the world of motorcycle manufacturing. He told the Journal-Sentinel newspaper, “We could literally be shipping motorcycles, probably within a couple of days, as soon as we brought back an assembly team. The bikes are just sitting there, covered in plastic, waiting to be finished.” |
| Getting a third start in bike building may not be as easy as the 65-year-old Buell seems to think. In order to build a thriving mass-production company, he must have a distribution network. Dealers, caught in two different company shutdowns within a few years of each other, may not be willing to take another leap of faith. |
| Having a lot of product on the floor without a manufacturer to provide OEM parts and support means the dealer could lose a lot of money. People who follow the auto industry will point to the General Motors Saturn product line as an example of a manufacturer-dealer disaster. |
| FIRST ATTEMPTED SALE |
| During the summer the company sold its “design consulting business” to Hero MotoCorp, an India-based company. Hero owned 49 percent of Erik Buell Racing at the time. In August, court-appointed receiver Michael Polsky stepped in to oversee an auction of some manufacturing equipment and some accounts receivable |
| Bruce Belfer, from New Jersey, submitted a bid for $2.25 million. Twice, he did not meet the deadline for closing the deal. |
| That didn’t stop some media outlets from saying Belfer was taking over. The Journal-Sentinel in Milwaukee did a feature on Befler and his plans for for Erik Buell. The story did not discuss Belfer’s financing. |
| This failed purchase led to the attempted December auction. |
| SECOND TIME AROUND |
| This is not the first time the Erik Buell line has folded. In 2010, Buell Motorcycle Co closed shop. Liquid Asset Partners bought the company and sold off the equipment and other assets piece by piece. |
| The original Buell Motorcycle Company was owned by Harley-Davidson. Harley abandoned Buell in 2009 and Erik Buell restarted the company on his own. |
| When in business, Erik Buell employed 130 at the Wisconsin plant. |