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![TMCNet: Intangible assets of Fort Worth motorcycle maker are for sale [Fort Worth Star-Telegram, Texas]](http://images.tmcnet.com/siteart/invisible.gif)
Intangible assets of Fort Worth motorcycle maker are for sale [Fort Worth Star-Telegram, Texas]
(Fort Worth Star-Telegram (TX) Via Acquire Media NewsEdge) Nov. 14--Want a piece of a motorcycle company?
American IronHorse, Fort Worth's high-end motorcycle maker, sought Chapter 11 bankruptcy protection for the second time in April. The tangible assets -- mostly equipment and motorcycle parts -- fetched $3 million, a fraction of the amount Textron Financial Services, its major secured creditor, has lost over the years. A former IronHorse chief executive, Buck Hendrickson, estimated the losses at more than $12 million.
Textron forced the manufacturer into liquidation in August and is selling off what's left, the intangible assets -- brand name, designs and engineering innovations.
Scott Meyers, who along with his wife was IronHorse's last owner, has offered $1 for the company's brand. But a Massachusetts firm hired by Textron to dispose of the intangible assets believe it's worth considerably more.
Meanwhile, Textron is in a legal battle against Meyers, who says Textron drove IronHorse out of business by abruptly canceling dealers' floor-plan inventory lending, then hurt the company's image by "dumping" hundreds of bikes at bargain-basement prices on an as-is basis with no warranties.
This, Meyers alleges in court documents filed in August, amounts to unlawful interference and fraud.
Textron countersued in federal bankruptcy court here, accusing Meyers of breach of contract and illegal interference in its business. The case is scheduled to be tried in July.
Neither Meyers nor Textron spokeswoman Karen Papa responded to repeated requests for comment.
This summer, Textron tried to sell bikes directly to the public at a Fort Worth event, until a local dealer alerted authorities, who stopped the sale, said the dealer, Charles Strand of Grand Prairie's Renegade Motorcycles. Under Texas law, only franchised dealers can retail new bikes and vehicles.
Textron's bikes were shipped back to a Kentucky warehouse, then back again to North Texas after Strand negotiated to acquire 60 bikes the lender had taken from defaulting dealers, he said. In all, Strand says, he has gotten more than 100 of the 2008 model motorcycles and is selling the $35,000 list-priced choppers for as low as $20,000.
Meyers is also suing Strand in bankruptcy court for buying bikes from Textron in alleged violation of his franchise agreement, which Meyers maintains restricts purchases only through IronHorse.
Strand shrugs off the allegation and says that 600 to 700 more bikes will be coming on the market and that he's interested in picking up a good number.
"We're still buying them," said Strand, who also is chief executive of Sun Water Systems-Aquasana, a water purification company in Haltom City. "I am buying more this week. There are a few IronHorse dealers left. I doubt if they can make it through the winter, and Textron will be repossessing." He said he is also talking to a South Carolina bank and GE Money.
In May 2008, Textron had lent IronHorse under Meyers $1.5 million and extended a $4.7 million line of credit to help the former accountant and aerospace executive acquire the company out of bankruptcy. Meyers beat out New York investor Lynn Tilton of Patriarch Partners, who stormed out of the federal courthouse visibly furious. Textron also had been lending to IronHorse's dealer network since at least 2004, and in 2005 it was announced that Textron would provide $40 million in floor-plan financing.
IronHorse has had a roller coaster history. Bedford entrepreneur Bill Rucker and Tim Edmundson of Birmingham, Ala., launched the venture in 1998.
It has had five chief executives, at one time including hedge fund manager Dwayne Moyers, since investors removed Rucker in 2003.
Through most of the turmoil, the city of Fort Worth has been supportive. It made the company an enterprise-zone project eligible for limited sales tax reimbursements totaling $2,000 for every resident hired from 1999 through 2004. A city entity, Fort Worth Local Development Corp., covered the luxury bike maker's property taxes when it fell behind in 2006 and 2007, the corporation said last year.
After Textron Financial cut off dealer loans and two banks stopped offering 10-year loans to prospective motorcycle buyers, any hope for a turnaround appeared bleak. Textron had embarked on a new commercial strategy in December 2008 to abandon lending to resort developers and companies like IronHorse, and concentrate instead on loans in support of products its parent company makes, aircraft and golf carts.
According to a bankruptcy hearing transcript, Meyers' lawyer, Cynthia Cole, said her client was negotiating a settlement with Textron until talks broke down Aug. 6. Although Textron had sold off tangible assets, Meyers still had employees developing new chopper models at the time, she asserted.
Textron got permission from the court to sell IronHorse's intangible assets, including name and intellectual property, then hired Streambank, a Massachusetts firm that had successfully marketed the names of two bankrupt national retailers: KB Toys, for $2.1 million, and Circuit City, for $14 million.
Now it's up to the marketplace to decide the value of IronHorse's brand and intellectual property.
Meyers disclosed in a court filing that he offered $1 for the whole lot. Strand, the dealer at Renegade, said in an Aug. 18 e-mail quoted in a court document that he was willing to pay $15,000 to $20,000 for IronHorse's Internet domain name to use for a motorcycle parts site.
Margaret Birlem, a Streambank partner, said far more might be raised.
"Already we have gotten calls, actually quite a few calls, since we announced the sale Tuesday," Birlem said. "The value is what the highest bidder -- if we choose to run an auction -- is willing to pay. ...Millions if we find the right buyer."
And the motorcycle manufacturer itself doesn't have to be relaunched, although that would help, Birlem said.
There could be licensing agreements for using the name and logo on apparel and motorcycle parts, she said. "We've talked to some dealers who might have some interest and to some aftermarket parts suppliers. This is just the tip of the iceberg."
Streambank is convinced there's treasure in all of the engineering work, noting IronHorse's distinctive split gas-tank design and a digital information center that rested on the handlebars.
Not everyone is so sure.
Hendrickson, who was CEO from 2004 to 2008, said the digital display was his biggest warranty headache, prone to breakdown from road vibrations or water. "We had to swap out almost every one," he said Friday.
Rucker, who was interested at one point in 2008 in buying his old company back, said Streambank contacted him to see if he was still keen on re-acquiring the brand and other intellectual property (he's not) or consulting for the firm without payment (again, no).
"You are not going to put [the logo] on motorcycles," he told the Star-Telegram. "All you can do is sell it to a Chinese manufacturer to put on scooters, and that market is cut in half.
"Someone is going to buy the brand for a song."
BARRY SHLACHTER, 817-390-7718
To see more of the Fort Worth Star-Telegram, or to subscribe to the newspaper, go to http://www.dfw.com.
Copyright (c) 2009, Fort Worth Star-Telegram, Texas
Distributed by McClatchy-Tribune Information Services.
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