Erik Buell Racing Goes Under
Erik Buell Racing, the same company that introduced us to the 1190R race bike, has officially ceased operations after announcing its plans to file for protection from creditors under Chapter 128 of Wisconsin’s bankruptcy code.
The stunning announcement caught a lot of people by surprise, not the least of which are its 126 employees who suddenly find themselves without any jobs. But according to its attorney’s, the company just didn’t have enough money keep going and was also burdened by more than $20 million in outstanding liabilities.
Company founder Erik Buell said in a statement that the company thought it had secured the necessary funding to keep its business alive. Unfortunately, that supposed funding never materialized, which forced the company to, Buell’s own words, “do the best we can under the circumstances for all parties concerned.”
The company is now seeking protection under a state statute to protect itself from paying off all of its liabilities. As part of the process, bids from outside parties will be solicited for the company as part of the state’s Chapter 128 process. The winning bid, wherever it comes from, will be determined by a state court with any proposed sale still subject to court approval and “higher or better bids.”
The most likely scenario, or the scenario EBR anticipates will happen would be for all of its assets to be sold, which will effectively put it out business for good.
The news is a bit surprising considering that it came completely out of left field. But it’s also not shocking considering that the brand already had a tumultuous business history even before it assumed the name Erik Buell Racing back in 2009. It’s predecessor, Buell Motorcycle Company, experienced its own share of problems, culminating in parent company Harley-Davidson discontinuing the entire line after 15 years of being a wholly-owned subsidiary.
Buell and Harley did bring the company back in 2009 under Erik Buell Racing, tagging it as an independent company run by Buell himself. But as the motorcycle continued to evolve and bigger companies began investing more in their bike departments, Erik Buell Racing just couldn’t keep up despite receiving $25 million from Indian motorcycle firm Hero MotoCorp in 2013 in exchange for a 49.2 percent stake in the company.
Continue reading to read more about Erik Buell Racing’s unexpected closure.
Why it matters
I’ll be the first to admit that I was never really into Erik Buell Racing. I had seen some of its bikes back when it was still Buell Motorcycle Company, but I didn’t really think too much of them. Part of that was probably due to access because there weren’t really a lot of Buell bikes in my area.
Having said that, I was still bummed to hear about the company’s closure, largely because I felt really bad about its 126 employees losing their jobs just like that. It’s not right for something like that to happen, but then again, when you’re a business that’s barely above water, you run the risk of sinking further and further down until you completely drown.
Reports that the company was actually hiring engineers from yamaha, Boeing, and General Motors as late as last year also added to the perplexing turn of events that led to the company deciding to cease operations overnight.
This isn’t a knock on Erik Buell’s skills as a motorcycle designer because I’ll be the first to admit that he’s actually created a lot of cutting-edge bikes in the past. But no matter how good he was - and still is - with a pencil and a sketch pad, it somehow didn’t translate into the business side of things.
It’s a disappointing end to a company that seemed snake-bitten by its own lack of resources from the very beginning. Hopefully, all parties affected by this closure can move on with their lives and look forward to better days ahead.