GILROY
– It’s unlikely whoever buys Indian Motorcycle’s trademarks will
build bikes in this town, a liquidation official hired by the
company said Tuesday.
Meanwhile, after 12 weeks of negotiations with little to show
for them, Indian Motorcycle’s asset sale is heating up.
Bill Melvin, a motorcycle collector who owns a retail
liquidation firm in Grand Rapids, Mich., announced this morning he
has reached a deal to purchase all Indian’s equipment.
GILROY – It’s unlikely whoever buys Indian Motorcycle’s trademarks will build bikes in this town, a liquidation official hired by the company said Tuesday.
Meanwhile, after 12 weeks of negotiations with little to show for them, Indian Motorcycle’s asset sale is heating up.
Bill Melvin, a motorcycle collector who owns a retail liquidation firm in Grand Rapids, Mich., announced this morning he has reached a deal to purchase all Indian’s equipment. He is still negotiating to buy the company’s real estate and trademarks, he said, but he now effectively owns all the contents of Indian’s buildings.
“We’re not sure what we’re going to do with it yet,” Melvin said of the equipment.
Melvin does, however, plan to pick up a piecemeal property auction that the Credit Managers Association of California – which Indian hired to broker the sale of its assets to pay off its massive debt load – is expected to cancel today, Melvin said.
“It’s out intention to sell any of the assets that aren’t necessary to a manufacturing operation,” Melvin said.
A showing for the auction items will still be on Jan. 19 and 20, and the auction will still begin on Jan. 21.
Meanwhile, discussions today are expected to determine whether the Matrix Capital investment group will drop out of the bidding or further engage in pursuing the trademarks of the oldest American motorcycle company, one of Matrix’s partners said Wednesday. Matrix has vowed repeatedly to build new Indian motorcycles in Gilroy.
Since Oct. 24, CMA estate manager Chuck Klaus has been negotiating with parties interested in buying Indian’s trademarks and its physical property in Gilroy. Indian hired CMA to sell its assets in order to pay off its massive debt.
Asked Tuesday if there is any chance of Indian’s third incarnation basing itself in Gilroy, as the second Indian did for the past five years, Klaus said, “I don’t think so.
“I rather doubt it,” Klaus said. “That could change, but … it doesn’t look like it right now.”
Although CMA is still negotiating with several potential buyers, one – which Klaus would not name – now stands out as the front-runner.
“We are working toward closing with a particular buyer,” Klaus said. “Right now we plan on closing some time in February.”
Nevertheless, Klaus said, there is no commitment yet.
“I’ll talk to anybody until the day we say ‘sold,’ ” Klaus said.
Klaus’ statements indicate that Matrix Capital has fallen out of favor, since Matrix’s spokesmen continue to say that they would restart production in Gilroy. Gilroy resident Rey Sotelo is fronting the Matrix group, which takes its name from one of its partners, an Orange County venture capital firm.
The owner of that firm, David Huntington, said his group is still very much in the running.
“Chuck is responding to (the offers) he has in front of him at the moment,” Huntington said Wednesday, in response to Klaus’ statement about Indian’s chances in Gilroy fading.
Huntington would not clarify this statement except to say that he expected to know by this afternoon whether Matrix will stay in the bidding or drop out.
The 12-week-old Indian asset sale could wrap up equally soon, Huntington said.
“Everything is very close to consummation here,” Huntington said. “We’re within a couple days here of saying whether, ‘Yeah, we’re ready to open here on a certain date,’ or, ‘We’re not.’ ”
Klaus declined comment on who the leading bidder is. Sotelo expressed confidence two weeks ago that Matrix was the front-runner at that time.
Sotelo also said at that time that Matrix can begin building motorcycles within 30 days if it buys both the physical property and the trademarks or within 90 days if it buys only the trademarks.
Several potential buyers are still interested in Indian’s intellectual property – that is, its trademarks and logos – but they are no longer interested in buying a package deal of these and the physical property, Klaus said.
Huntington said his group may pursue some of Indian’s physical property as well as the trademarks – “whatever’s necessary to get it into production,” he said. Conceivably, he said, this could pre-empt the Jan. 21 auction.
Susan Valenta, director of the Gilroy Chamber of Commerce, was saddened to hear Klaus’ statement that a Gilroy reopening is unlikely for Indian.
“If that is the case, it would be a disappointment,” Valenta said. “We really embraced the company. They provided a lot of nice jobs for people. … Indian Motorcycle was very highly regarded and a very highly valued business in Gilroy.
“I have an emotional attachment because I really like the company,” she added.
Many of Indian’s 380 former employees have been out of work since then-President/CEO Lou Terhar gathered them together at lunchtime on Sept. 19 to tell them that the factory was shutting down, effective immediately. The workers had no prior warning.
Frances Poling, of Gilroy, is one of the few former Indian workers who has since gotten a full-time job working with motorcycles – Indians, no less. She now sells bikes at the Indian dealership in Gilroy, and she’d rather keep working there than go back to work in the factory. However, she’d like to see Indian restart locally on behalf of its other former employees who really want their old jobs back.
“I would have hoped it would have happened because there are a lot of people out there who want it to happen,” Poling said, “but I wouldn’t have gone back there. Been there, done that.”
