Winner should be announced by year’s end
GILROY
– It’s been seven weeks since seven bidders made offers on the
defunct Indian Motorcycle Company’s assets, and the leading auction
official now says a winner will probably be announced by Christmas
or New Year’s Eve at the latest.
Winner should be announced by year’s end
GILROY – It’s been seven weeks since seven bidders made offers on the defunct Indian Motorcycle Company’s assets, and the leading auction official now says a winner will probably be announced by Christmas or New Year’s Eve at the latest.
“I can’t imagine it going any further out than the end of the year,” Chuck Klaus, estate manager for Credit Managers Association of California, said Wednesday. Indian hired CMA to liquidate its trademarks and Gilroy factory and pass the proceeds on to its creditors – an alternative to bankruptcy court.
Klaus has predicted sell-by dates before, to no avail. The auction keeps being extended, Klaus maintains, because the price keeps rising, but rising from what, and how much? These are questions neither he nor Indian Chairman Frank O’Connell have answered, for fear of jeopardizing the final price.
O’Connell’s responses indicate, however, that Indian and CMA officials may have found the original seven bids disappointingly low on Oct. 24. While O’Connell wouldn’t go so far as to acknowledge that Wednesday, he came close.
“I don’t think anybody knew what to expect in the original bids,” O’Connell said, “but I think we’re encouraged by the fact that, as time has gone on, the bids have gone up.”
Klaus refused to say whether he found the original offers disappointing.
Asked if offers have been in the $25 million range, both Klaus and O’Connell declined comment. Could the company sell for $50 million? No comment from Klaus. Seventy-five? O’Connell said he wouldn’t speculate because last-minute offers can always be surprising. One hundred million? “Very doubtful,” O’Connell said.
Klaus did confirm that some of the original bidders have dropped out and that the field continues to narrow.
At least three bids are still alive, however, and perhaps more.
There’s at least one offer on the table from someone who plans to resell Indian’s assets and not restart motorcycle production, O’Connell acknowledged. He also confirmed that there is at least one offer from a company that plans to build motorcycles again in Gilroy, and at least one from a firm that plans to restart production elsewhere.
Klaus and O’Connell have publicly said they would prefer to sell to someone who would restart motorcycle production, but they haven’t revealed how much this promise would be worth to them monetarily. This outcome would be better for Indian’s vendors, who would have someone new to sell to, and for Indian’s dealers, who would have a new source of inventory, according to Klaus.
Vendors and dealers are believed to be among Indian’s many creditors, as are the 380 or so employees Indian laid off without warning when it shut down on Sept. 19.
Of the original seven bidders, five were anonymous. The two known ones are the Matrix Capital group, fronted by Gilroy resident Rey Sotelo, and Bill Melvin, a retail liquidator and motorcycle collector from Michigan. Neither could be reached for comment as of press time.
