Any updates on Hymer/Roadtrek/Carado future?

[jgmarcotte]

Has of last Friday Hymer north America files for bankruptcy see below:
https://www.therecord.com/news-story/9179587-about-900-workers-lose-jobs-in-cambridge-recreational-vehicle-plant-shutdown/?utm_source=rvlifestyle&utm_campaign=72a8899e3d-email_campaign_2019_02_18&utm_medium=email&utm_ter m=0_7a885efcc5-72a8899e3d-258447445&mc_cid=72a8899e3d&mc_eid=ea044a8683

[mumkin]

It is apparent that the Hymer started Corner Flag in Delaware to get their name off the final result and get their last big cash transfer of $5M to cover final payrolls and vacation to the top of the bankruptcy list.

One interesting detail that a Canadian CPA/lawyer on our FB page included in his summary on the financial details for us from the receivership papers:

"At the 2017 year end ENA had 166m in assets including intangible asset values of 55m and were showing 48m of shareholder equity, in other words all of the shareholder equity was invested in intangible assets, trademarks, goodwill, etc."

This is from the Ernst and Young audit, not the current audit. So, basically all they have to sell of real value to the new owners is basically the IP. (along with parts, tools, and some half built vans)

I personally still see Thor lurking in the shadows waiting to snatch just this for a song at the end of the 6 weeks. We will never know whether this was planned ahead between the two companies. Even so, I don't see Thor restarting RT in Canada. They will either bury the competitive name or add it to one of their factories in the US. Best case would be a small operation in the old factory to complete work in progress and maybe continue.

For the last 2+ years, since their purchase of Roadtrek, Hymer added two building leases, one (or both?) of which was converted to a factory, rushed out 7-10 new models that were mostly in competition to their own company... Roadtrek... accumulating lots of inventory and salary costs... on credit which has ended up dumped into Roadtrek. The more I think about it, any malfeasance by the three executives was likely insignificant in bankrupting the company.

[Kim]

what will be the impact to the 6 year warranty ? i got 2017 ss agile all electronic. i got issues and replaced one of two inverters, and one of two battery set last year.

[ClassB4Me]

Originally Posted by mumkin

I personally still see Thor lurking in the shadows waiting to snatch just this for a song at the end of the 6 weeks. We will never know whether this was planned ahead between the two companies. Even so, I don't see Thor restarting RT in Canada. They will either bury the competitive name or add it to one of their factories in the US. Best case would be a small operation in the old factory to complete work in progress and maybe continue.
[/FONT]

Hope springs eternal

Unless the Hymer family wants to ensure the former Hymer NA managers are introduced to their Federal and State tax agencies for filing false tax reports, it appears they are recouping any losses by liquidating the company via receivership and the sale to Thor.

Why have we seen no files charged?
If the suspended managers were 100% innocent, they would be attesting to such on the record.

There is no reason to resume work in Canada. They can produce any Roadtrek 2.0 in the United States in current Thor factories with existing labor (provided they have the branding rights).

When someone decided to shut down all web-based sites and social media, it signals their intent to mothball or restart elsewhere.

The honest Canadian employees have been shafted royally.

[bwolfsohn]

My (conspiratorial ) concern is that the present receivership status has been "pre-arranged" between thor and ehg and the end result will be a "catch and kill" (see AMI/National Enquirer) sale to thor who will use it to bury potential roadtrek competition to their class b lines. It might be worth more to Thor to bury it than to any prospective buyer...
For the sake of all the long and short term employees now out of a job, i hope my concerns are misplaced..

[booster]

The idea of Thor waiting in the wings is an interesting thing, and has been around since the beginning of all this, but it sure puts some tough questions on to Thor if they do, I think.


As mentioned by others, not many tangible assets, and what there is probably isn't worth much outside of it's current location, so likely not very valuable at all to Thor.


That leaves the name plates and designs from Roadtrek only, because they already have the Hymer stuff for the most part.


If they buy the brand of Roadtrek, what do the do about legacy warranty issues, which I think would be pretty substantial going forward. If the plan on honoring the warranties for existing units, it it going to be expensive so they would have to get it almost for free to make worthwhile, if indeed the brand is worth producing anymore now or down the line.


If the dump all the old warranties, they would be up for a huge publicity issue which would probably really reduce interest in the brand.


The best solution for Thor might be to buy the brand to get the engineering drawings and be able to produce it as a Thor or Airstream branded product with very little upfront design and engineering cost.

[ClassB4Me]

I will go on record and say no one who uses the Roadtrek brand in the future will provide / honor the warranty previously provided.

Honoring the Roadtrek warranty would represent a liability that would be hard to put a value upon or contain. Who would assume that sort of liability for a company in receivership (with no monies set aside) unless a law would mandate such?

I could see Thor reprising the Roadtrek 2.0 brand and as a good-will gesture offer a 1-2 year third-party warranty (similar to what dealerships sell). This way they can possibly capture Roadtrek customers into one of the Thor brands.

People have short memories and new customers will have no memory of this contretemps for the Roadtrek brand.

[mumkin]

Here's another bit of good news. Jeff Hanemaayer has shown up on Facebook ... gave a bit of his take, which I won't post without his permission. But the hopeful detail is that he is offering to assist any interested buyers and is in a position to do so since he holds the lease to the Kitchener factory. (a point which I had thought about)

That might bring some possible buyer who was leery of things.

Meanwhile I will cross my fingers that it is someone other than Thor. LOL

[avanti]

Originally Posted by ClassB4Me

I will go on record and say no one who uses the Roadtrek brand in the future will provide / honor the warranty previously provided.

Honoring the Roadtrek warranty would represent a liability that would be hard to put a value upon or contain. Who would assume that sort of liability for a company in receivership (with no monies set aside) unless a law would mandate such?

I could see Thor reprising the Roadtrek 2.0 brand and as a good-will gesture offer a 1-2 year third-party warranty (similar to what dealerships sell). This way they can possibly capture Roadtrek customers into one of the Thor brands.

People have short memories and new customers will have no memory of this contretemps for the Roadtrek brand.

I agree with this.

The situation is not that complicated. No need for deep conspiracy theories. The sale was arranged so that all the rotten assets were sequestered into a sacrificial entity. No surprise there. As part of a liquidation, any bits with residual value will be sold to the highest bidder. If that turns out to be Thor (which seems likely), so be it.

The "short memories" part is key. Thor (or whoever) could let things cool for awhile, and still get a lot of value from a resurrected RT brand in a few years. Very few potential buyers will remember anything about warranties lost in a bankruptcy.

I also don't think that the specific van designs have much value. They aren't unique, and frankly not all that inspired for the most part. Most aspects of them are not readily protectable from an IP perspective, anyway (witness how easily ARV was able to produce a near exact clone of the GWV Legend, while the latter was still being produced).

[booster]

Originally Posted by avanti

I agree with this.

The situation is not that complicated. No need for deep conspiracy theories. The sale was arranged so that all the rotten assets were sequestered into a sacrificial entity. No surprise there. As part of a liquidation, any bits with residual value will be sold to the highest bidder. If that turns out to be Thor (which seems likely), so be it.

The "short memories" part is key. Thor (or whoever) could let things cool for awhile, and still get a lot of value from a resurrected RT brand in a few years. Very few potential buyers will remember anything about warranties lost in a bankruptcy.

I also don't think that the specific van designs have much value. They aren't unique, and frankly not all that inspired for the most part. Most aspects of them are not readily protectable from an IP perspective, anyway (witness how easily ARV was able to produce a near exact clone of the GWV Legend, while the latter was still being produced).

I think the "cooling off period" to resurrect the brand if they kill the warranty would be key, as there would be a lot of flap if they did it right away after hanging a lot of people out to dry.


The designs of the van as such are not anything special, most certainly, and not proprietary. But if a buyer wanted to get the Roadtrek brand out into production quickly, the engineering drawings would be a very large benefit because already done and ready to go. Orders could be at suppliers in days or weeks instead of months or years.

[gregmchugh]

Posted today on Wendland’s group by Jeff Hanemaayer...

For those of you who don't know me, I grew Roadtrek from a handful of employees in 1982 to the #1 selling class B motorhomes in North America by 1990, a position Roadtrek held until 2011 when a private equity firm called IOP acquired a majority of Roadtrek. (Roadtrek has been #1 or #2 since.)

I resigned my employment at Roadtrek and fully divested in 2013 and resigned from the board of directors in 2016 when Germany’s Erwin Hymer Group (EHG) acquired Roadtrek from IOP and renamed it Erwin Hymer Group North America (EHGNA).

Now that EHGNA is in receivership, a number of people have suggested that I come back to run Roadtrek. But I live just northeast of downtown Toronto and 10-15 minutes further away than when it took me 1:15 to get to the Roadtrek plant in the morning and 1:40 to 2 hours to get home. And then I was there "only” from 8:15 am to 4:45 pm 3 days a week. You need a leader there 5-6 days and 50+ hours a week (at least for the first while).

I will however assist in the effort to find a turn-key buyer to restart manufacturing Roadtreks. For the sale of EHG to Thor, EHGNA was carved out of EHG and sold to Corner Flag LLC of Wilminton, Delaware (which I belive is owned by BXV Partners, also of the same address). EHGNA can use the EHG brands for up to 12 months to finish and clear out inventory. EHGNA owns the Roadtrek brand, so it is only Roadtreks that can be built in the long term, which is the most valuable brand anyway.

And as the landlord at the Roadtrek plant on Shirley Ave in Kitchener, ON, I will also be cooperative with any prospective buyer for Roadtrek’s operations.

I realize that a whole lot of people and companies are taking huge pain in this receivership/bankruptcy process. And I feel terribly for them. But the best that we can all do now make it attractive for a buyer to restart operations.

One advantage of the receivership/bankruptcy process is that it allows a buyer to buy only the most valuable assets at well less than book value. This makes restarting Roadtrek mfg very attractive. This of course means employment for at least some of the employees, more business for the many suppliers and service providers, parts and service for owners (and maybe even warranties!), and product for the dealers. It certainly won’t make up for the losses, but it’s better than a piecemeal liquidation of the assets for pennies on the dollar.

(Please do not send me a Facebook friend request. While I appreciate the sentiment, I prefer to keep my FB friends to my personal friends. I hope you understand.)

[booster]

(and maybe even warranties!)

That sound ominous.

[ClassB4Me]

Erwin Hymer employees protest the loss of their jobs

Amazing...

Why are they not collectively getting in their cars and protesting in front of Jim Hammill' (and others) homes? He was in charge of the EHG NA ship when it ran into the rocks on the shore line.

$100 million dollars in assets recovered can go a long way in helping these 800 displaced employees restart their lives.



Why are they not vigorously holding these EHG NA managers in Canada accountable and getting answers? If Jim Hammill has time to speak to Mike W., he can face his former employees.

[wincrasher]

Originally Posted by BillsPaseo

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...

Funny, I believe I speculated on that and got a response that I was some kind of idiot.

[gregmchugh]

Originally Posted by wincrasher

Funny, I believe I speculated on that and got a response that I was some kind of idiot.

I’ve called you lots of things but never an idiot...

[Boxster1971]

Originally Posted by gregmchugh

Posted today on Wendland’s group by Jeff Hanemaayer...

"... For the sale of EHG to Thor, EHGNA was carved out of EHG and sold to Corner Flag LLC of Wilminton, Delaware (which I belive is owned by BXV Partners, also of the same address)." ...

I dont think it is a coincidence that Corner Flag LLC is also registered in Florida...
Detail by Document Number

... and that BXV Partners is also a FOREIGN LIMITED LIABILITY COMPANY registered in New York...
https://opengovny.com/corporation/4824056

Just private shell companies that can handle these situations and make money doing it.

[RossWilliams]

There is no mention in the court filing of any losses from embezzlement or other criminal activity being a cause of the company's financial problems either in the filings or the accompanying documents. If criminal activities happened, they weren't disclosed to the court.

[Novadude59]

Originally Posted by RossWilliams

There is no mention in the court filing of any losses from embezzlement or other criminal activity being a cause of the company's financial problems either in the filings or the accompanying documents. If criminal activities happened, they weren't disclosed to the court.

From the court filings:

“At this time, the investigation into the financial irregularities is not complete and their full extent is not yet known. However, it appears that these financial irregularities materially impacted the viability of the business of ENA and preliminary indications are that (i) the profitability of certain of the EHG NA Entities was materially exaggerated or otherwise mischaracterized, and (ii) such financial irregularities were pervasive throughout ENA and may have pre-existed Erwin Hymer Global Group's acquisition of ENA.” (Application Record, part 1)

These “financial irregularities” as described clearly suggest fraud. They also “materially impacted the viability of the business.” I’m no expert in any of this, but based on this description I don’t see how this isn’t criminal behavior.

[gerrym51]

Originally Posted by Novadude59

From the court filings:

“At this time, the investigation into the financial irregularities is not complete and their full extent is not yet known. However, it appears that these financial irregularities materially impacted the viability of the business of ENA and preliminary indications are that (i) the profitability of certain of the EHG NA Entities was materially exaggerated or otherwise mischaracterized, and (ii) such financial irregularities were pervasive throughout ENA and may have pre-existed Erwin Hymer Global Group's acquisition of ENA.” (Application Record, part 1)

These “financial irregularities” as described clearly suggest fraud. They also “materially impacted the viability of the business.” I’m no expert in any of this, but based on this description I don’t see how this isn’t criminal behavior.

if you go back to posts done in the last quarter of 2015 and read them going forward you will find innumerable posts about how much roadtrek was spending to correct ecotrek problems-both the batteries and other ancillary issues. You will find posts about how long they could keep it up since it never seemed to abate. I think more likely the fraud was made not to steeal money but to make the company look better and not a loser.

[brianh]

The other shoe may still fall here. That "investigation into the financial irregularities is not complete" is telling, because what is complete now is the audit that EHG funded. Those auditors may well have turned over their findings to the authorities, who could decide to take up the matter themselves if they believe there is strong evidence of criminal activity.

The (reports? rumors?) of falsified invoices with fake VINs and family members on the payroll who didn't actually work could back up gerrym51's theory that the "irregularities" were to prop up the profile of the business rather than to embezzle money. If you combine fake invoices with fake employees (who don't actually cash paychecks), you can explain why those invoices aren't producing cash. The books show the money coming in from sales and going right back out as payroll in the same month, so the balance sheet is clean. It wouldn't show any additional profit, but it will show higher revenue, and revenue growth is often more appealing to potential investors and acquirers than profit margin is. Of course, once you try to reconcile those books with bank statements, the gig is up, but it's possible that EHG didn't bother to go that far, assuming those irregularities predated the Roadtrek acquisition. Thor obviously dug a bit deeper and noticed the shenanigans, and here we are.

If this is indeed what happened, then it's entirely possible that this same result - Roadtrek in bankruptcy - could have played out a year or two earlier, as without the new money from EHG propping them up, their debts would have caught up to them earlier.

It's a fascinating story, it will be interesting to see how it continues to unfold. I don't feel quite the passion about it as many of you because I don't own and have never owned a Roadtrek, but as a buyer who got into the class B market just before this all went down and was strongly considering one, I've followed the story with keen interest. I certainly do feel compassion for the employees and the current owners, who were victims of these schemes.