Any updates on Hymer/Roadtrek/Carado future?

[ClassB4Me]

Originally Posted by mumkin

Didn't they bother to do audits? Even before their purchase? Or did they let the CEO,CFO. and COO hire their buddies to do it? They should have been caught... and Hymer should have to pony up to get the company back up and running.

I'm personally disgusted at their lack of ethics... but suspect that this bothers them not at all...

They have grown through acquisitions (similar to Roadtrek) for years. This is the first time that I recall things went awry in a relatively short time.

No one walks away from a profitable organization. The decision to jettison EHG NA only makes sense if they determined (with the help of auditors) the deceit in Canada was too pervasive to unravel (hence the silence from all the managers - total silence).

Nothing prevented them at any time to say simply ' I have done nothing wrong' The CONTINUED silence is very telling.

[Marcus]

The latest news is that all the employees at both locations have been terminated and that Irwyn Hymer NA is in receivership. This according to CBC , Canadian Broadcasting Corp. Not good news for the owners of their RV, including myself.

[wincrasher]

Did anyone notice that the latest info is around $300 million in debt, but with the news from Thor, that the debt was $206M? And they don't own the manufacturing facilities? Sounds like what I suspected earlier was true - EGH loaded up a bunch of extra debt into EHGNA so they could collapse it. I suspect they also extracted as much of the IP as they could and will either sell it separately as a Hymer family asset, or it was bundled in the Thor deal.

[stevegoldfield]

I'm not a lawyer and won't try to summarize this legal order about EHGNA, but here it is. https://www.alvarezandmarsal.com/con...c-court-orders

[RossWilliams]

https://www.therecord.com/news-story...profitability/

"Financial firm Alvarez & Marsal Canada Inc. has been appointed receiver of the company, including its assets and property. The firm is known for assisting with corporate restructuring and turnaround management."

[blueridgetraveler]

I haven't been a member very long. I joined because I am looking at a class B and was leaning towards purchasing a smaller class B like the Axion. I am glad I waited a bit and found this place. The closest EH dealer here in NC has both Axion's with the Ecotrek system unfortunately. I really hate that at least for now, a number of lesser expensive options are off the table. This will likely make other brands more expensive also.

[rowiebowie]

Originally Posted by blueridgetraveler

I haven't been a member very long. I joined because I am looking at a class B and was leaning towards purchasing a smaller class B like the Axion. I am glad I waited a bit and found this place. The closest EH dealer here in NC has both Axion's with the Ecotrek system unfortunately. I really hate that at least for now, a number of lesser expensive options are off the table. This will likely make other brands more expensive also.

Welcome to the forum blueridgetraveler!

I suspect you're right about other makers or dealers taking advantage of a shortage to raise prices now that it looks like Roadtrek's out of the picture. But steep discounts on new RT models on dealer lots could be attractive, minus the Ecotrek of course.
.

[ClassB4Me]

Originally Posted by mumkin

I don't see any question on who owns EHGNA now... same ones that owned it before. The Hymer family...

I guess it is true. The Hymer family left EHG NA with no ability to cover payroll before the company went into receivership. How could a profitable company suddenly become unprofitable - with no substantial mention of embezzlement (did it actually occur?)

• Characterized as: Debt Rich.. Cash Poor
• Could not pay its weekly staff payroll of $1,000,000
• Had to borrow $5,000,000 from Corner Flag (who now owns what is left of EHG NA) to cover payroll
• Debts include $95 million to US to European banks. $80 million Euros to parent company (Now Thor?)
• Accrued vacation was not funded and had to be borrowed

So, it looks like EHG NA was starved to death. The revolving credit lines were cut, and a ton of debt exists with what remains a relatively small company.

The Hymer family left no cash to cover payroll when they suspended production and completed the sale to Thor.

Video Update

Bankruptcy?
My apologies if this has been posted elsewhere

[RossWilliams]

"In short, Comer Flag desires to ensure that an independent court-officer has an opportunity to assess whether a solution can be identified for ENA whereby operations are restarted and to pursue such solution to the extent economically feasible."

Corner Flag is the new owner of Roadtrek.

[blueridgetraveler]

Originally Posted by RossWilliams

"In short, Comer Flag desires to ensure that an independent court-officer has an opportunity to assess whether a solution can be identified for ENA whereby operations are restarted and to pursue such solution to the extent economically feasible."

Corner Flag is the new owner of Roadtrek.

Edited since I didn't realize they were the group that loaned the recent money, with all that debt I doubt they would want to restart production up.

[BillsPaseo]

"Economically feasible" is the problem - 300 million in debt, no cash, no credit...

[BillsPaseo]

Originally Posted by blueridgetraveler

That's some broad speculation, what do you have to back this up - that Corner Flag (whoever that is) is the new owner and will be restarting operations?

From the linked article above:

"The North American operations are now a whole-owned subsidiary of Corner Flag.

Erwin Hymer owes $95 million to European banks, 80 million euros to its parent company, and 85 million to trade creditors.

The Waterloo Region-based business Jay Fencing also has a $65,000 lien against the company’s plant located on Tyler Drive."

Corner Flag is the parent company. Looks like they dumped every bit of debt they could find into the subsidiary. Restarting operations sounds like a pipe dream...

[blueridgetraveler]

I would hope that really happens since both brands keep things competitive (and I am starting to look to purchase) but it seems like if that was happening than it would have been mentioned in the local article about the plant closing.

[booster]

IIRC, the legal documents talked about a 4 or 6 week window to find a buyer, don't recall anything about a restart of operations by the family/Corner Flag, but it could be there.


But, if there is $300 million in debt, it is highly likely that the business wouldn't be "economically feasible" like Bill mentioned.


I am not sure if Hymer loaded up the NA with debt or not, as when the entire business was going to Thor there would likely be little reason. They would have had to do that loading very quickly at the end, which seems less likely. There were also comments from employees that said that vendors were holding shipments because on non payment for quite some time before all this came to light, so the financial issues and debt was probably already there. If the business couldn't make money when the economy has been this good, it would never be able to in lean times, unless the lack of funds was do to thievery.

[BillsPaseo]

You're probably right on the debt Booster, I was just thinking that because of the fact that so much of the debt is owed to European banks, which seems odd for a NA company.

[booster]

Originally Posted by BillsPaseo

You're probably right on the debt Booster, I was just thinking that because of the fact that so much of the debt is owed to European banks, which seems odd for a NA company.

It probably has to do with Hymer getting better interest rates in Europe do to their size compared to what NA could get. Of course the credit rating of NA might have also made it tough here compared to in Europe that is used to dealing with Hymer.

[RossWilliams]

Originally Posted by blueridgetraveler

Edited since I didn't realize they were the group that loaned the recent money, with all that debt I doubt they would want to restart production up.

I am sorry, I wasn't clear. This is a direct quote from the filing requesting the company be put into receivership.

"In short, Comer Flag desires to ensure that an independent court-officer has an opportunity to assess whether a solution can be identified for ENA whereby operations are restarted and to pursue such solution to the extent economically feasible."

It also says

"It is anticipated that the Receiver will be able to leverage market intelligence acquired through the prior sale process to streamline and expedite any process for the solicitation of bids for a turn-key operation."


It also says this:

"if Corner Flag and the Receiver determine that no offer satisfactory to Corner Flag and the Receiver, can be obtained by the end of a 6-week term, the Receiver and Corner Flag will agree on a process for the orderly wind-down of the receivership. If, however, a viable offer is identified prior to the end of the six-week term, the Receiver Term Sheet contemplates additional funding to consummate such transaction, on agreement of both Corner Flag and the Receiver."

Again, Corner Flag is the entity Hymer NA was sold to prior to the closing with Thor.

[RossWilliams]

One other thing in the court filings:

"ENA licensed the intellectual property necessary to manufacture and sell recreational vehicles under the Hymer, Carado and Sunlight brands from
other entities in the Erwin Hymer Global Group (the "IP Licenses"). Pursuant to the Thor Transaction and Carve-Out Transaction, the IP Licenses are to be terminated.

However, the CarveOut Transaction contemplates that where IP Licenses are terminated, ENA is to be provided with a "run-off' license for a reasonable period of time, not exceeding 12 months, on terms similar to those provided under the prior IP Licenses, so as to permit ENA to, among other things, sell off existing inventory and/or satisfy existing obligations towards customers or other third parties."

[brianh]

From what I've seen here then, it sounds like what Corner Flag now owns is all of the remaining inventory of ENA, and all of the IP of Roadtrek. The debts that many keep alluding to are effectively gone. The receivership is essentially the Canadian equivalent of chapter 7 bankruptcy, and whomever acquires the remaining assets, in whole or in part, are protected. What this means is that if someone does buy Corner Flag, it would have everything needed to effectively resurrect Roadtrek - the brand, the plans, designs, patents, marketing research and materials, customer data, etc.. The question that will be answered in the next 6 weeks is whether Roadtrek would be a viable company on its own, or viable as a division of a larger company.

[ClassB4Me]

Maybe the outcome has been pre-determined: Thor and the Hymer family (with help from legal counsel) had the opportunity and means to structure their deal to give them priority as EHG NA was placed into receivership.

They left little / no cash to EHG NA so it looks like a structured deal to give Thor 1st crack at assets they may want to exploit for a fraction of what they would have paid pre-scandal (without the liabilities).

Erwin Hymer owes:
1) $95 million to European banks (possibly secured lines of credit)
2) $80 million euros to its parent company (EH - Now Thor)
3) $85 million to trade creditors


The priority scheme in bankruptcy dictates the order in which claims are
paid.

The claims standing on the highest rung must be paid in full before any claims on the next rung can be paid anything. The most senior class of
creditors gets paid in full, then the next class,and so forth, until you come to a class for which assets are insufficient to pay everyone in full.