Rucker Enters American IronHorse Bankruptcy Fray
April 25, 2008
Apr 22, 2008
The American IronHorse bankruptcy saga continues with company founder and ousted CEO Bill Rucker emerging as a possible contender for buying the foundering manufacturer.
Rucker’s attorney Mark Petrocchi filed paperwork Monday in U.S. Bankruptcy Court’s Northern Texas division listing Rucker as a “potentially interested party” in the auction for American IronHorse. Bids for the bankrupt company are due May 5, when the highest and best initial bid will be selected.
Rucker’s is the first recognizable name in the contest to acquire the company he cofounded in 1995 with Tim Edmondson. A trio of investors seeking back debt forced American IronHorse to file for protection under Chapter 11 March 25.
Since then a series of bankruptcy court filings have help flesh out the financial turmoil that led what was likely the number two custom motorcycle OEM into insolvency. Paperwork filed in March showed the company saw its sales to dealers slide from $96 million in 2005 to $53 million in 2006 and then to $25 million in 2007.
Efforts to prop up sales by introducing lower-priced models didn’t take, and late last year American IronHorse stopped production of its lineup due to what the company called a “continuing erosion of market conditions.”
It’s also been revealed that the company owes about $22 million to Textron Financial, a primary noteholder of the company that has also arranged post-bankruptcy financing for AIH under what is called a “debtor-in-possession loan.” Under this deal Textron will supply a fresh infusion of cash to help with IronHorse’s continuing business operations.
With the bankruptcy filing now official, American IronHorse has released a list of its 20 largest unsecured creditors. These are in addition to the three investors who forced the bankruptcy and the creditors that subsequently signed on to the case.
The amount sought by the 20 listed totals $2.6 million, including the following motorcycle industry-related companies:
Daytec frames, Hesperia, Calif., $367,975.89
R.C. Components, Bowling Green, Ky., $311,020.85
Gladwin Paint Co., San Antonio, Texas, $150,665.91
PIAA Corporation, Portland, Ore., $112,656.94
IronHorse of Texas, Fort Worth, Texas, $82,586.17
S&S Cycle, Viola, Wis., $62,757.28
The list also includes BrandEra Ltd., a Texas-based marketing, PR and advertising firm founded in part by American IronHorse’s former VP of marketing, Beth Owens, and Lakeshore Harley-Davidson, a dealership in Libertyville, Ill.
Peter and Andrea,
Hello there. I’m a regular reader of your blog and enjoy your voice on the custom motorcycle industry. Good stuff. I see that you picked up our latest story on American IronHorse (Rucker Enters American IronHorse Bankruptcy Fray). Could you please link back to our original story?
Here’s the link to our story that you copied to your blog: http://www.dealernews.com/dealernews/Breaking+News/Rucker-Enters-American-IronHorse-Bankruptcy-Fray/ArticleStandard/Article/detail/511766?contextCategoryId=2704
Best,
Dennis
I would have never thought they would have done $96 million or even close to that ever. It is hard to believe they did that in 12 years total. I did not realize the market was that kind of money. So add in Big Dog, Bear and all the rest. WOW! And with the country in the state it is in. What are we to expect. With Victory so far is doing what looks well and the introduction of it’s dresser. Let us hope they are business savvy enough to survive. Now we are to have soon a new Indian line. The people that took this on are known for bringing back and reviving companies. They did it with Crist Craft. A once very powerful and well known boat company. It was once one of the top three in the USA if not the world. I hope they all do very well. As I’m sure we all do. Now I do not know much about these bikes like Iron Horse and the other small so called production bikes. Other than I’ve heard a little about how they are not as dependable as a true factory bike. It sounds like Indian does have engineers in their design. And that they are not going to introduce it if all the bugs are not worked out. Good. So that means it is not a trial and err. I read when Big Bear had a recall on the bolts braking in the sturt area I believe it was. I wonder how one (a builder) could have used a bolt that was inappropriate. With out the proper engineering any thing is doomed. Someone who went to tech schooling told me OCC only recently started using Lock tight. That is crazy if it is in fact true. Come on Huffy uses Lock tight. Now I guess what I’m getting at is a good board of directors engineers and a good safe dependable product. And one should survive. And we can ride.
Hey Dennis,
We’re fans of your magazine too.The link is up!
Beach
Hey Knuck,
Just goes to show you how hot the industry was a few years ago.I think they had a bike called the Slammer which looked pretty cool to me. I never rode one but I liked the look of it.I think it one bike of the yrear one year but, I am not sure and I feel too lazy to look it up.
I hope the company survives as they employed a bunch of people and they were a recognized name in the industry.I hate to see anyone go down.The guys mentioned in the article who are looking are good guys, talented guys.Bill and Tim can do it right if they get the company.
Beach
Well what happends to those with Ironhourse Motorcycles and what’s the deal on this Bankrupt deal… I have to know cause I have a Tejas 2007 model and only had it for 5 months. ” What ! ” Do I have to be concerned about losing or trading in the bike to better myself or what, I never had to deal with this before. I thought Ironhorse was a good company to be with that’s why I went to them and to worry about my financal backbone over this Bankrupt deal I’m curious to what I should do, anybody out there that can help me out - PLEASE - e-mail me at http://www.ninjacustomz@yahoo.com
THANKS, CHOPPER
Hey,
I am not an attorney so I can’t offer legal advice and I don’t have the expertise. I can say that if I bought a bike from these guys and I felt like I was cheated I would talk to an attorney. I am quite sure there are many in this position and there may be a class action suit for various reasons. I would certainly look for an A.I.H. blog and see what others are doing and I would speak to the dealer I bought the bike from.If this dealer is no longer in business I would find another who sold motorcycles other than A.I.H. and is still in business.I might contact Rucker and I would definitely contact the court where the bankruptcy filing was made to find out who is involved and what recourse I might have.
This is a bad one and a lot of reputable people who are getting hurt. I doubt anyone will honor the warranties but I don’t know that for sure.If losing your warranty is the worst thing that happens then it is not the worst thing that can happen. I am sure there are people who put down deposits on motorcycles they will never see. They probably will have to stand on line in hopes of getting their money back.I am aware of similar situations where people put down as much as $25,000 on a motorcycle and lost it.
If, as you say there was money laundering or other crimes committed those involved hopefully will be prosecuted and punished.
It’s a terrible thing when something like this happens.It’s a black eye for the industry, the employees and the innocent customer.
To the man who is wondering whether to sell his bike I can only say that if it was me and the bike functioned properly I wouldn’t do it. You must have liked the motorcycle to purchase it and hopefully you will enjoy riding it. Panic is not the answer and there are plenty of honest mechanics who can and will work on your bike when it needs repairs or service. You will have to pay out of pocket but, you would have had to pay anyway. The important thing is the quality of the machine. I don’t believe that the value will drop any more than any other bike. Over the long haul it shouldn’t matter. I am sorry for anyone who got burned.We hope you all will come back and tell us what happens.We will follow the events as best we can and share what we learn with all of you.
Thank you for writing to us.
Beach
It is great news that Bill Rucker did not win the bid to purchase American Iron Horse. What made him think that he could run a multi-million dollar company? Ego? Rucker Performance is headed into a financial downward spiral. Employees at Rucker Performance have to run all over town to get their checks cashed, hoping that they will get their money so they can pay their bills. Meanwhile Mr. Rucker is on vacation catching some sun in Mexico. Most of his employees do not know that their medical insurance has been canceled, due to lack of payment. Wait until they start getting the doctor bills in the mail, I am sure Mr. Rucker will take care of them. I am not a lawyer but I bet that the Texas Work Force Commission would frown on this. Not to mention that it is illegal to write checks when you know that the funds are not in the bank. Why his employees do not leave I do not know.
Interesting comments, mostly based on rumors and not facts. I was one of the original 4 investors in AIH and served on the Board Of Directors for 6 years prior to resigning due to strong disagreements with Dwayne Moyers and others on the direction they were taking the company. None of them rode motorcycles or had any concept of the motorcycle industry… and in my opinion were all a bunch of crooks.
Tim and Bill may have had some talent in building bikes, but were both horrible businessmen. I was head of the Audit Committee and made the recommendation to fire Bill Rucker after determining that he had taken over $300,000 inappropriately from the company during a time when the company couldn’t pay its bills, through a cash account he called “the special projects fund”.
His previous company, Tracom, went Bankrupt stiffing local banks for over $3,000,000 from what I understand. My guess is that Rucker performance will soon be gone as well. Had he gained control of AIH, I would have immediately quit as a Dealer.
I resigned from the Board in 2003 and started Iron Horse of Texas, the Fort Worth AIH Dealership which has been the top AIH Dealership for the last 3 years.
The new owner, Scott Meyers, is the first CEO of the company that has any background in this industry and seems to sincerely want to do the right things for dealers and AIH owners. He has agreed to honor all existing customer warranties, even though he doesn’t have to. He has agreed to work with dealers to try and get them taken care of on monies owed to them by the previous AIH, even though he doesn’t have to. I for one want to support him and give him a chance to get the company back on its feet as I think it is a great brand.
Hell, Scott Meyers, the new CEO, even came to our 4 Year Anniversary event last Saturday and helped load, unload and sell bikes… see him in action here; http://www.ihot.us/Motorcycle_Photos.cfm?PID=58
Mr. Meyers has only had control of the company for 1 week. I would hope that everyone would give him a chance to walk his talk, as no other upper management at AIH ever has. I feel strongly that he is the right guy to do it!
Charles Strand, Iron Horse Of Texas
Hi Charles,
Welcome to the Beachcuiser!! Thank you for the interesting insight into AIH. It seems a lot of people are not big Bill Rucker fans. We have met him but do not know him personally. These are tough times in the industry and tough times call for smart, hard working, shrewd management. Everyone now says the housing bubble was obvious.Interesting how so few had the foresight to prepare for the crash.Housing of course is directly related to the industry as many bought bikes using rising home equity and equity lines of credit.We all knew that things couldn’t go on at the pace of a few years ago but, no one envisioned how fast things would turn.
As in every stock market crash a well known bank or broker goes bust, it seems it happens in our industry as well. It is sad that it is AIH this time.
We too are hoping things get worked out for all the good people who work there, the dealers and the loyal customer base.Your comments are encouraging.
You are a stand up guy for going the extra mile to support those who support you.We respect that very much. Personally, I thought the “Slammer” was a very sharp machine.
Please keep us posted on the goings on in your business and AIH. We will post it so our readers can keep up.
Beach
So now what happens to the dealers with AIH bikes still in inventory? Textron, AIH floorplan now wants their interest money. The bikes don’t sell due to the situation, so what are dealers who once believed in this company to do?
Going out of business sale at Rucker Performance, please do not call, instead come by since our phones do not work, and make us a deal we can not refuse.
post this so that ever one can see, or lets see if Scott Meyers can fix this. I went out and got a new AIH around 4 month ago and only could ride it three times.
It has been the biggest you know what. And no one will work on it , the dealer that I purchase it from won’t even help. All it is at this time is a big paper weight that I am paying for every month. The first thing Scott should do is to take these bikes out of the dealers that wont help the (this is the key word) consumers, that spends the hard earn money to buy a bike.
Hey Scott,
I am sorry to hear about your bike.Scott Meyers said he would honor waranties so: if I were you I would try and contact him or the customer service people at the main office. I would call, email, write, whatever it took.Sometimes you can get a bad dealer and you have to fight. I believe that it is in A.I.H’s best interest to do what they promised. I would give Mr. Meyers the benefit of the doubt. He is taking the shot to revive the company and he needs to be credible. Let us know what happens. Go to the website where you can get all the contact information.
good luck man
Beach
Is this Rucker the guy on BBO from Texas that builds the custom dressers and cars. The one who had a bike mishap and his dauther took over?
Hey Knuck,
I think that is correct. I’m not sure but I remember Bill Rucker did injure himself awhile back. I’m just too tired to do the research.
Beach