Hobbico - BANKRUPT!

[martinfan5]

1 hour ago, The Creative Explorer said:

I read this post in Germany today: http://www.nw.de/lokal/kreis_herford/buende/22028763_Revell-Mutterkonzern-in-den-USA-stellt-Insolvenzantrag.html

Revell Germany states that they will not be affected by this, other than having a new investor/owner, From what I understand, they will continue, no matter the outcome in Germany. Plus they state, they have a very healthy prospect.

So, it seems like good news for this part.

Revell-Germany Reaffirms Continuity and Solidity of Overall Business Operations

Group Parent Company Hobbico, Inc. Files Petition for Chapter 11 Relief in United States and Pursues Sale;
Revell-Germany Confirms No Impact to Vendors, Suppliers and Customers Throughout Process.

BUNDE, Germany – January 11, 2018
Revell-Germany announced that its parent company, Hobbico, Inc. (“Hobbico”) filed a petition for relief under Chapter 11 of the United States Bankruptcy Code while it seeks an orderly finalization and implementation of its comprehensive restructuring plan. In conjunction, Hobbico also announced its plan to sell the company.
Because Hobbico’s bankruptcy filing was made in the United States and is strictly limited to the company’s U.S. operations, Revell-Germany is unaffected. Additionally, Revell-Germany suppliers, vendors and customers will not be impacted by the process.

“Our Revell-Germany operation is not filing for bankruptcy protection” said Louis Brownstone, President of Hobbico, Inc.

“It will continue to provide the same high-level of service to our customers. We are optimistic that the filing will better position the U.S. operations for future growth.”

“Most important for all of us at Revell-Germany, we continue to operate ‘business as usual’ moving forward,” said Stefan Krings, President of Revell-Germany.

“Looking ahead, our top priorities remain continuing to build our business with our high-valued vendors and suppliers, while simultaneously providing the same high-level of product support to our customers.”

Although Revell-Germany is not part of the filing in the United States and will continue to operate its business, the sale of Hobbico could have future implications for Revell-Germany. The decision by Hobbico to file for bankruptcy and pursue a sale of the company allows Hobbico the opportunity to reduce their debts, restructure their liabilities, attract new capital investment and position the overall company for future growth.

From January 31 to February 04, 2018, Revell will be present at the Nuremberg Toy Fair presenting its new products for 2018.

"We are convinced that we can continue the growth path of 2017 with our attractive range of novelties and welcome our international customers in Nuremberg," says Krings.

[SfanGoch]

48 minutes ago, martinfan5 said:

From January 31 to February 04, 2018, Revell will be present at the Nuremberg Toy Fair presenting its new products for 2018.

"We are convinced that we can continue the growth path of 2017 with our attractive range of novelties and welcome our international customers in Nuremberg," says Krings.

New to the novelty range will be a Bankruptcy Courtroom diorama in 1:24 scale complete with detailed auctioneer and bidder figures.

[Classicgas]

1 hour ago, SfanGoch said:

New to the novelty range will be a Bankruptcy Courtroom diorama in 1:24 scale complete with detailed auctioneer and bidder figures.

Now that there is funny!

[bismarck]

2 minutes ago, Classicgas said:

Now that there is funny!

x2!! 

[VW93]

2 hours ago, SfanGoch said:

New to the novelty range will be a Bankruptcy Courtroom diorama in 1:24 scale complete with detailed auctioneer and bidder figures.

And will be offered at a price of 3.00 versus the normal 30.00 list price to reflect the 10 cents on the dollar ratio of the proceedings.

[Howard Cohen]

From Revell today:

We want to thank you for your concern regarding the recent news of the Hobbico chapter 11 filing. Revell will continue to run business as usual and continue to provide the best in class model kits to our customers. We appreciate the continued support and we look forward to a bright future! Please stay tuned for the latest news on new product releases.

 

[modeladdict]

On 1/11/2018 at 12:10 PM, mikemodeler said:

Not disputing your statement entirely, what I am stating is that as long as you are buying kits from a seller (LHS, Hobby Lobby, eBay store, etc.) and that seller reorders from Hobbico, it DOES benefit Hobbico. If myself and 10 friends come into your hobby shop because we heard you have the new Ice patrol Jeeps and buy 11 of them, isn't it safe to say you will re-order more of them? And that re-order will benefit Hobbico?   That is the point I am making- whether I buy a kit from Tower Hobbies or from you, it counts as a sale and will drive more purchases. 

That's pretty much what I said..."All your purchase does is give the hobby shop the data they need to determine what and if they should buy Revell kits in the future. Again those kits will already be paid for and if they don't sell it's the hobby shop that loses out not Revell. "

[martinfan5]

6 hours ago, SfanGoch said:

New to the novelty range will be a Bankruptcy Courtroom diorama in 1:24 scale complete with detailed auctioneer and bidder figures.

, I dont care who you are, thats funny right there

 

On side note, because it is a Revell kit,  there will issues with it,  the auctioneer's gavel will be a no name gavel and will be undersized.

[niteowl7710]

1 hour ago, martinfan5 said:

, I dont care who you are, thats funny right there

 

On side note, because it is a Revell kit,  there will issues with it,  the auctioneer's gavel will be a no name gavel and will be undersized.

The ceiling of the courtroom will also be several scale inches too low...

[martinfan5]

Just now, niteowl7710 said:

The ceiling of the courtroom will also be several scale inches too low...

You win

[426 pack]

9 minutes ago, niteowl7710 said:

The ceiling of the courtroom will also be several scale inches too low...

The walls will be warped.

Edited January 13, 2018 by 426 pack

[The Creative Explorer]

5 hours ago, modeladdict said:

That's pretty much what I said..."All your purchase does is give the hobby shop the data they need to determine what and if they should buy Revell kits in the future. Again those kits will already be paid for and if they don't sell it's the hobby shop that loses out not Revell. "

Close, but not quite. You are too focussed on the modelkits on the shelf. But the picture is bigger than that. If they don't sell, the LHS won't reorder. Therefore Hobbico looses money.
But, if we all went to the LHS and buy those shelf-kits, the LHS will reorder, feeding Hobbico with new cashflow and therefore continueity. It's not data you provide the LHS, it's a stock-order for the LHS, needing to get more stock on the shelfs.

[ranma]

Toys be CEO's.htm

[Junkman]

15 hours ago, Howard Cohen said:

From Revell today:

... Revell will continue to run business as usual ...

 

That's exactly what I'm afraid of.

[martinfan5]

7 hours ago, Junkman said:

That's exactly what I'm afraid of.

I see what you did there.

[mikemodeler]

13 hours ago, The Creative Explorer said:

Close, but not quite. You are too focussed on the modelkits on the shelf. But the picture is bigger than that. If they don't sell, the LHS won't reorder. Therefore Hobbico looses money.
But, if we all went to the LHS and buy those shelf-kits, the LHS will reorder, feeding Hobbico with new cashflow and therefore continueity. It's not data you provide the LHS, it's a stock-order for the LHS, needing to get more stock on the shelfs.

Thank you for stating what I was trying to convey and thought I had, but maybe not everyone understood what I was saying.

[niteowl7710]

Alrighty folks, here's the latest.  Hobbico filed a motion today to sell itself and it's assets via auction in Chicago in two weeks.

https://www.reuters.com/article/bankruptcy-hobbbico/bankrupt-hobby-products-maker-hobbico-expects-one-or-more-bidders-idUSL2N1QI07S

[mikemodeler]

7 hours ago, niteowl7710 said:

Alrighty folks, here's the latest.  Hobbico filed a motion today to sell itself and it's assets via auction in Chicago in two weeks.

https://www.reuters.com/article/bankruptcy-hobbbico/bankrupt-hobby-products-maker-hobbico-expects-one-or-more-bidders-idUSL2N1QI07S

This is a quite common procedure as one of my customers recently went through this process and ended up being pursued by three different suitors before settling. The good news is that usually the company ends up with a well funded owner and the company thrives afterwards. The unknown here is the effect on the Hobbico employees in Champaign, IL headquarters long term as the new owners may have similar operations and would consolidate them into one location.

[Dave Van]

Let's crowdfund and buy  Revell!!!

[jeffdeoranut]

10 to 1 debt to asset ratio? really?  what were these idiots doing?  im sure that the patent issues, bad labor contracts and overpaid execs were all part of problem but in the end the fault lies with the decision makers.  after all, they are the ones who decided to skirt around the patents, agreed to the bad contracts and took their money.  same old American business story: company opens with new and exciting products, sales are up-everybody happy, then everyone gets greedy, execs want the golden parachute, labor want more pay, prices go up, less money is put into r & d for new products, sales go down, no one is held accountable and everyone loses except for a few execs.  heres an example: my ex father in law retired from Chrysler after 30+ years.  his last job pay rate was $33 per hour. his job classification was "fill in" meaning that after clocking in each day at 6 am he was paid for 8 hours even if everyone showed up in his department in which case he was free to LEAVE if he chose but still got paid for 8 hours.  MANY DAYS HE TOOK A BBQ GRILL TO WORK AND HE ALONG WITH OTHER FILL INS SPENT THEIR 8 HOURS COOKING AND PLAYING CARDS WHILE STILL EARNING $33 PER HOUR.  of course none of those guys would have taken a pay cut-they wanted more!!.  the plant was shut down  a year after he retired.  and it was staggering to see foreclosure signs in front of $450,000 homes.  the simple truth is that most people are greedy and care for nothing but themselves.

[niteowl7710]

53 minutes ago, jeffdeoranut said:

10 to 1 debt to asset ratio? really?  what were these idiots doing?  im sure that the patent issues, bad labor contracts and overpaid execs were all part of problem but in the end the fault lies with the decision makers.  after all, they are the ones who decided to skirt around the patents, agreed to the bad contracts and took their money.  same old American business story: company opens with new and exciting products, sales are up-everybody happy, then everyone gets greedy, execs want the golden parachute, labor want more pay, prices go up, less money is put into r & d for new products, sales go down, no one is held accountable and everyone loses except for a few execs.  heres an example: my ex father in law retired from Chrysler after 30+ years.  his last job pay rate was $33 per hour. his job classification was "fill in" meaning that after clocking in each day at 6 am he was paid for 8 hours even if everyone showed up in his department in which case he was free to LEAVE if he chose but still got paid for 8 hours.  MANY DAYS HE TOOK A BBQ GRILL TO WORK AND HE ALONG WITH OTHER FILL INS SPENT THEIR 8 HOURS COOKING AND PLAYING CARDS WHILE STILL EARNING $33 PER HOUR.  of course none of those guys would have taken a pay cut-they wanted more!!.  the plant was shut down  a year after he retired.  and it was staggering to see foreclosure signs in front of $450,000 homes.  the simple truth is that most people are greedy and care for nothing but themselves.

Except of course for the part where Hobbico isn't a multi-billion dollar company dealing with the UAW.  There's no Hobbico "factory", they have a few hundred people working directly for them, mostly in warehousing/distribution and various office roles.  Everything they sell is made somewhere else via contracted manufacturing.  Hobbico got it's debt to asset ratio up the way they did by trying to expand via acquisition.  The Traxxas lawsuits didn't help anything, but then again Traxxas is well known to be the "Thomas Edison" of patents - eg they sue everyone about anything they think they can - mostly to run other companies out of business.  That isn't to say the upper management is ponies and rainbows, they clearly have dirt all over themselves for refusing to pay out the ESOP payments and getting themselves under Federal investigations over that.

[mikemodeler]

11 minutes ago, niteowl7710 said:

Except of course for the part where Hobbico isn't a multi-billion dollar company dealing with the UAW.  There's no Hobbico "factory", they have a few hundred people working directly for them, mostly in warehousing/distribution and various office roles.  Everything they sell is made somewhere else via contracted manufacturing.  Hobbico got it's debt to asset ratio up the way they did by trying to expand via acquisition.  The Traxxas lawsuits didn't help anything, but then again Traxxas is well known to be the "Thomas Edison" of patents - eg they sue everyone about anything they think they can - mostly to run other companies out of business.  That isn't to say the upper management is ponies and rainbows, they clearly have dirt all over themselves for refusing to pay out the ESOP payments and getting themselves under Federal investigations over that.

Also keep in mind that when filing for bankruptcy, the debts and assets are listed as a range, the exact amounts are disclosed when the court officer goes through the company and determines what is owed and what is owned. A 10:1 debt to asset ratio is unlikely because their lenders probably would not let them get that far into debt, unless the debt is mostly attributable to lawsuits or unfunded pension or stock plan obligations. A company typically files for bankruptcy because they need to get their financial house in order and usually some bad management or business decisions are the root cause of the filing. In some cases, it is the business environment and nothing management could have done to avoid the situation. The losers in this case will be the employees, they stand to lose their shares of the company, possibly 401k money, and likely their jobs. 

[niteowl7710]

2 hours ago, mikemodeler said:

Also keep in mind that when filing for bankruptcy, the debts and assets are listed as a range, the exact amounts are disclosed when the court officer goes through the company and determines what is owed and what is owned. A 10:1 debt to asset ratio is unlikely because their lenders probably would not let them get that far into debt, unless the debt is mostly attributable to lawsuits or unfunded pension or stock plan obligations. A company typically files for bankruptcy because they need to get their financial house in order and usually some bad management or business decisions are the root cause of the filing. In some cases, it is the business environment and nothing management could have done to avoid the situation. The losers in this case will be the employees, they stand to lose their shares of the company, possibly 401k money, and likely their jobs. 

The 10:1 figure comes from the ranges stated in filing which was 10-50 million of assets vs 100-500 million in debts. Sure it's quite possible it's 48 mil assets and 101 mil in debts and not an exact 10:1 ratio, but it's still a mess.

[highway]

5 hours ago, Dave Van said:

Let's crowdfund and buy  Revell!!!

Yeah, I'm sure that would go well!! All there would be then in development would be kits people would want that don't realize that there have been cars produced after the 60s and 70s  or strange oddball vehicles only themselves and maybe on or two other people have any interest in! 

[Erik Smith]

1 hour ago, highway said:

Yeah, I'm sure that would go well!! All there would be then in development would be kits people would want that don't realize that there have been cars produced after the 60s and 70s  or strange oddball vehicles only themselves and maybe on or two other people have any interest in! 

Yup, we’d probably last all of two weeks!