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Hobbico files bankruptcy


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#31 Hans

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Posted 11 January 2018 - 07:21 PM

That's correct. Very common in the USA. They can continue to do business under the umbrella of Chapter 11 for many years to come if granted.
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#32 Hans

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Posted 11 January 2018 - 07:24 PM

So no reason at this moment to start hoarding that new Mustang 😜
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#33 b757captain

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Posted 13 January 2018 - 12:52 AM

Hey Mark, I was very active in RC during this time period as well.  I remember watching Hobbico swallow up companies like Top Flight, Robart and a few others.(Please don't quote me on those companies as accurate)  Didn't they also get Carl Goldberg and Sig?  I remember talking with the guys at the field how in the long run this just cannot be good for the hobbyist.

Don't they also own the franchise rights to Hobbytown USA?

If you don't mind me asking, which company was yours?

 

My company was Heritage R/C. Kept it going from 1995 and sold in 2003. New name became Skyshark R/C. Great folks, Mike and Angie Grey. They started out in Lake Havasu, Az but recently moved to Cape Coral, FL. I saw the trend back then not only Hobbico swallowing the competitiion (they approached me and low-balled an offer just trying to get rid of me cuz they couldn't compete on product) but also the trend away from kits to ARFs. I wanted no part of that. Mike initially tried the ARFs but dealing with the Chinese was too much of a hassle. He's found a great direction in electric power and has his own line of motors and batteries. After I sold out I kept designing kits for them but finally just burned out. I haven't asked lately how many kits they still sell but all of the ones I designed are still available. Kinda nice to see after 22 years and a fundamentally changed market! 

 

https://www.skysharkrc.com/

 

Cheers,

 

Mark


Edited by b757captain, 13 January 2018 - 02:43 AM.


#34 phasephantomphixer

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Posted 13 January 2018 - 01:12 AM

Isn't this similar to the fate of Marco Polo Dist. for Hasegawa, etc. in the States not long ago?



#35 LSP_Kevin

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Posted 13 January 2018 - 08:38 AM

Revell-Germany has just released a press release regarding this situation, and Spencer Pollard has published it in full on his blog:

 

https://thekitbox.wo...ess-operations/

 

Kev


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#36 tjtx

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Posted 13 January 2018 - 10:48 AM

They have to stick around till I can buy a Mustang with tail fillet!
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#37 VMA131Marine

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Posted 13 January 2018 - 05:58 PM

Having read the available articles and what's public on the BK filing, I am more or less convinced that Hobbico is doing this, at least in part, to ditch its obligations to its ESOP holders. Hobbico is an employee-owned company so all its employees get tax advantaged contributions of stock in the company. The catch is that when an employee leaves or is laid off (and Hobbico has laid off a lot of people over the last couple of years) they are entitled to a payout of the value of their ESOP shares 60 months after their termination date. Hobbico failed to make scheduled payouts from the ESOP at the end of 2016 and the share value plummeted by 80%. I did some digging and discovered that in 2015 the total value of shares in the ESOP was $70 million with 700 holders of shares for an average value per person of $100,000.
In the bankruptcy, claims of the ESOP holders are subordinate to all other creditors. Assuming Hobbico finds a buyer, the ESOP shares remain with the bankrupt company and the shareholders get whatever is left after all other creditors have been paid. Hobbico just received permission from the bankruptcy court to access $70 million in debtor-in-possession financincing to keep the restructuring going and find a buyer. This financing is senior to all other debt the company has and, presumably coincidentally, is about the same as the ESOP valuation in 2015. The sale of the company will also free it from the ongoing investigation by the Federal government into mismanagement of the ESOP.
So my guess is that Hobbico is sold and survives in some form, although maybe it won't remain in Champaign, IL, but spare a thought for the 700 or so current and former employees who are going to see a good chunk of their retirement savings wiped out by this move. Note that, like stocks in 401k's, ESOPs are not covered by US Federal government pension guarantees.
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Dr Russ

#38 CATCplSlade

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Posted 13 January 2018 - 06:12 PM

Having read the available articles...

 

This is very believable, and certainly not without precedent in the business world.


Working on: AIR - Revell Spitfire Mk IIa, Trumpeter F6F Hellcat   LAND - Bandai 1/30 Hummel, Zvezda Mercedes L4500A


#39 mmaben

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Posted 14 January 2018 - 02:46 AM

They have to stick around till I can buy a Mustang with tail fillet!

 

They'll be fine. Still waitin' for the B  :hmmm:


I just like airplanes

 

Mike                        Smirnoffcat    RomanianG-2

 


#40 wunwinglow

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Posted 14 January 2018 - 10:47 AM

So, as usual, big business gets away from bearing its responsibilities, and the little guys get stuffed.... Its the same the world over!
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My Father told me two things would happen as I got older.
I can't remember either of them....

 

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#41 Peterpools

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Posted 14 January 2018 - 12:55 PM

Why am I not surprised
Peter

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#42 Chek

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Posted 14 January 2018 - 05:16 PM

So no reason at this moment to start hoarding that new Mustang

 

No logical reason, but I just bought two to be certain.

 

Although usually when I do something like that, six months later they're clearing stock at £10 each.


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