Hobbico Files for Bankruptcy; Company Up For Sale
news-gazette.com/news/local/2018-01-10/hobbic...
news-gazette.comPosted Jan 10, 2018, 11:18 PM UTC
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news-gazette.comi wonder what will happen with revell now...
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I suspect someone will buy the remnants.
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Bankruptcy sale, probably.
Probably as a going concern, or if not, a liquidation in which bidders pay for particular assets. They are filing under Chapter 11, which means they're going to potentially seek a restructuring, and not going straight into liquidation under Chapter 7.
Looking at the debt ratio though, it's probably a good bet that the company won't be able to restructure, at least not as a whole unit.
It would not be atypical for a company like this to have a parent, and wholly owned (but legally separate) subsidiaries that could be sold off as individual self contained units. Where it would get tricky, though, is if the parent and subsidiaries share loans (or guarantee loans) among themselves.
It will be interesting to see if the company will be able to restructure, or whether it will be sold piecemeal, or flat out liquidated.
Looking at the press releases over the last decade, it also looks like they went on what was probably a debt fueled buying spree.
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I should note that the whole point of setting them up as separate units is in many cases for legal separation of their liabilities, including debts, and in other cases, for compliance reasons.
What is potentially worrying though, is that in this case, as the company was floundering, it may well have used the assets of some of the subsidiary companies to guarantee the debts of the parent, or vice versa, or their suppliers and creditors. That's when it becomes a bigger problem, because then not just is the parent bankrupt, but the subsidiaries guaranteeing or sharing the loans would also be in trouble.
Their last acquisition was just over a year, or two years ago (buying some RC brand), meaning they were still actively throwing capital to acquire companies.
The Chapter 11 filing also may have to do with a liquidity crunch, i.e. an attempt to use the filing to help generate liquidity (and flexibility through reorganization/restructuring) to solve that problem.
Cash flows from each of the subsidiaries can also be securitized and resold as securities, or to help generate lower rates on borrowing. A quick google search indicates at least one investor provided debt based financing. For example: http://www.cyprium.com/2014/10/cyprium-partners-announces-new-subordinated-debt-investment-in-hobbico-2/
However, the company appears to be private (i.e not publicly listed), we just don't know what corporate structure it really has aside from piecing together from the various press releases that it has a parent and a bunch of separately operated, independent subsidiaries that likely are wholly owned by the parent company (which is the one undergoing reorganization).
**Not legal advice, by the way.
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Do they own Revell?
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They acquired revell monogram, and revell germany. But I would be fairly surprised if at least one of them wasnt an independent subsidiary. Especially for the German side.
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I really like Revell Germanys newer models, so I hope they won't suffer from this.
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They are almost certainly an independent subsidiary that probably could be spun off as a separate business.
A self-contained business is often worth more than picking the assets. Further, the losses could be in various divisions, and not necessarily in the Revell Germany one.
But without data, it's just hard to say. Revell Germany's product line and recent release schedule would suggest that they seem to be doing fine.
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I guess my replacement sprue aint coming
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Might want to go out and buy another kit, maybe you can keep em afloat a little longer
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this explain why i never got those 240z decals
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From Revell? Try contact the European company and see if they can help you from there.
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Italeri rebrand of an ATM-Etrl F7F
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Contact the European company and check if they can help you.
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Good idea. If it's not here in a couple of weeks I'll do that. I was warned it could take a while, but it was pretty close to the end.
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Every model can be fixed with filler and sanding. Just put some on hobbico and sand it smooth
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Shit.
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This makes me doubt I’ll ever be able to witness the release of their 1/35 Halo Scorpion
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Traxxas mustve put the hurt on them
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And horizon hobby and hobbyking
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This is the parent company in the US that owns or distributes a number brands, such as Revell, Italeri, Hasegawa, Estes, and many others. Seems like a pretty big deal
Kinda sounds like the company was looted.
Debts 10x revenue and halting payments to the ESOP.
I never cared about distributors but right now I'm glad Bandai and their Star Wars kits are distributed by Bluefin.
would this affect buying kits from said brands from like amazon?
Shouldn't affect day-to-day operations until April at the earliest.
post filing i mean? would it really affect people like amazon or do they source directly from overseas?
I don't think anyone could give you a definitive answer at this point
I'm not sure how Amazon buys Revell. Hobbico has a whole division called United Model Distributors set up to sell their brands directly to big-box mass retailers like Hobby Lobby and Wal-Mart so I guess they go through that. I'm not even sure how much or even if Revell is actually fulfilled by Amazon, the company I work for sells on Amazon and occasionally we get picked to fulfill certain Revell items. It's always fun to come in in the morning and see you've sold like 24 '66 Mustangs overnight...
Amazon would presumably have either a supply contract or a "order as you go" contract.
That a company declares bankruptcy doesn't always mean they simply "stop" operating. Companies in Chapter 11, if I remember right, can still keep operating, subject to supervision of the court. The reason is that once a company enters into bankruptcy, part of the point is to preserve the value of the debtor entities so as to lead to a bigger payout/settlement to creditors on the back end.
As for filing, it looks like Hobbico already filed for Chapter 11. Now comes the part where the court and various creditors and Hobbico argue over restructuring plans, and attempt to come to an agreement that permits restructuring. Failing that, the business can be liquidated or sold off piecemeal and a recovery paid to creditors based upon a certain pro-rata share.
Again, not legal advice.