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HobbiCo / Great Planes / Tower Hobbies

Bad news if you like Arrma vehicles, pretty much all the inventory of their cars is excluded from the purchase agreement due to the patent infringement cases with Traxxas.

The Nero stuff was pretty obvious as Hobbico hasn't been able to sell those for quite a while now but it looks like there is also some infringement case related to the receiver box so any vehicle with a receiver box (all of them) won't be included in the sale. All parts for those vehicles except the receiver box are included however.

If anyone likes reading legal documents:

http://www.jndla.com/cases/hobbico/docket%20no.%20299.pdf
 
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svt923 said:
The article from the local paper covering this story said a hearing to approve bids from the auction was scheduled for 3/28. It is very possible the court has approved the bid if that hearing went as scheduled. Even still, the purchase would not be finalized until early April as a best case scenario.
Click to expand...

Correct, the auction was held on 3/28 and they will go to court on 4/2 to have the courts blessing on the successful bidder. There has to be some time for objections from creditors, debt holders, shareholders, etc. which must be filed by today 3/29. According to the docket filed yesterday, Horizon was the successful bidder. At this point, unless there is some objection filed today, the court will likely approve the deal.


Purchase price was $18.8 mil, inlcude Champaign IL property, all inventory (except "alleged" Traxxas infringing inventory), all AR, equipment (except specifically excluded), contracts, intellectual property, and other legal jargon.
 
skinnyj said:
It reminds me of when everyone thought that the T-Mobile/AT&T merger was a done deal until the courts said otherwise.
Click to expand...


Big difference was that deal was voluntary, both are still viable companies today. This was in part of a bankruptcy in which Horizon was no part of and Hobbico would eventually cease to exist if continued on and likely be liquidated.
 
calcagno45 said:
Correct, the auction was held on 3/28 and they will go to court on 4/2 to have the courts blessing on the successful bidder. There has to be some time for objections from creditors, debt holders, shareholders, etc. which must be filed by today 3/29. According to the docket filed yesterday, Horizon was the successful bidder. At this point, unless there is some objection filed today, the court will likely approve the deal.


Purchase price was $18.8 mil, inlcude Champaign IL property, all inventory (except "alleged" Traxxas infringing inventory), all AR, equipment (except specifically excluded), contracts, intellectual property, and other legal jargon.
Click to expand...

The only things they are not getting:

Estes (sold to another company for 6 million)
Revell US
Revell Germany
US Model
All of Hobbico's debt and liabilities
 
calcagno45 said:
Big difference was that deal was voluntary, both are still viable companies today. This was in part of a bankruptcy in which Horizon was no part of and Hobbico would eventually cease to exist if continued on and likely be liquidated.
Click to expand...

The point was that, despite both companies wanting the merger, the courts still put the kibosh on it for anti-trust reasons.

As a T-Mobile customer, I wanted it, as well. It would have filled some of the gaps in T-Mobile's coverage.
 
svt923 said:
Bad news if you like Arrma vehicles, pretty much all the inventory of their cars is excluded from the purchase agreement due to the patent infringement cases with Traxxas.

The Nero stuff was pretty obvious as Hobbico hasn't been able to sell those for quite a while now but it looks like there is also some infringement case related to the receiver box so any vehicle with a receiver box (all of them) won't be included in the sale. All parts for those vehicles except the receiver box are included however.

If anyone likes reading legal documents:

http://www.jndla.com/cases/hobbico/docket%20no.%20299.pdf
Click to expand...

I've been saying that I think Arrma will die after HobbiCo is gone. I honestly have a hard time seeing why any company would want to keep them alive. They don't offer much different, they are a new company, and then there's the lawsuit on top of it.

The local news outlet to HobbiCo and Horizon doesn't say a word about any finalized purchase. No RC news outlet is announcing the purchase has been finalized. To me that says it definitely hasn't been finalized.
 
JatoTheRipper said:
I've been saying that I think Arrma will die after HobbiCo is gone. I honestly have a hard time seeing why any company would want to keep them alive. They don't offer much different, they are a new company, and then there's the lawsuit on top of it.
Click to expand...

I agree, their 1/10 scale stuff can all easily be replaced with what ECX sells and the 1/8 scale stuff can be replaced by the (much better) 8ight platform. The Outcast is the lone cool vehicle left in the Arrma lineup and Horizon could easily cobble together a short wheelbase truggy to replace it if needed.
 
mikemcE said:
Where is the debt going, employees ownership ?


Hang up and Drive
Click to expand...

My guess would be that the proceeds from the sales of assets will pay to Hobbico's creditors for pennies on the dollar. The courts will decide who gets what, how much and in what order.

As for the employee payouts... A big bottle of lube?
 
JatoTheRipper said:
The local news outlet to HobbiCo and Horizon doesn't say a word about any finalized purchase. No RC news outlet is announcing the purchase has been finalized. To me that says it definitely hasn't been finalized.
Click to expand...


The bid and purchase agreement are finalized as of yesterday but still has to be blessed by the courts on April 2. Then the deal will be final final.
 
mikemcE said:
Where is the debt going, employees ownership ?

Hang up and Drive
Click to expand...
I think that's the entire point of the bankruptcy and sale - to pay off as much debt as possible.

calcagno45 said:
The bid and purchase agreement are finalized as of yesterday but still has to be blessed by the courts on April 2. Then the deal will be final final.
Click to expand...
Where did you see this info?
 
mikemcE said:
Where is the debt going, employees ownership ?
Click to expand...


skinnyj said:
My guess would be that the proceeds from the sales of assets will pay to Hobbico's creditors for pennies on the dollar. The courts will decide who gets what, how much and in what order.

As for the employee payouts... A big bottle of lube?
Click to expand...


As skinnyj, pennies on the dollar.

$18.8mil from Horizon, $7mil from Estes Industries buying the Estes-Cox lot, so $26million to service over $110mil in debt...
 
What an absolute shit show.

So what redundant RC models are getting cut?

Ascender or scx10 or SCX10ii
Yeti or twin hammer
ect, ect

It kind of sucks to look at loosing options even if you didn't buy any of them.

Buy hey maybe Tower will have a full line of horizon products, and vendors that left Tower under the bankruptcy will return. Considering some have signed up with horizon.

If that easy pay remains and towers selection increases that would be a win for me.

At this point I have to say it sucks to be Traxxas, having your competitions consolidate.
 
When it hits this point, creditors will take whatever they can get. 10-25 cents on the dollar is a hell of a lot better than zero.
 
Also, as the party being owed money, I believe this gives you the ability to write off the outstanding debt in your books, thus eliminating bad assets against you. Next quarter that asset is gone. It's an oversimplification, but I think it works along those lines.
 
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