GILROY
– A new auction has opened for the Indian Motorcycle brand,
which has been on the market since last fall.
GILROY – A new auction has opened for the Indian Motorcycle brand, which has been on the market since last fall.
Credit Managers Association of California has scheduled a June 29 auction for Indian’s intellectual property: trademarks, logos, etc. CMA is selling Indian Motorcycle Company’s assets in order to pay off the defunct business’ creditors. Each bid is due by June 24 and must be accompanied by a $2 million deposit.
CMA has set a minimum bid amount of $2.5 million.
“We hope to get better than that, obviously,” CMA estate manager Michael Joncich said Wednesday.
Many Indian riders, dealers and vendors speculate that the brand has been devalued by the company’s demise and the seven-month delay since CMA first put it up for auction in October.
“The (intellectual property) will sell at auction for much less than (bidders) were willing to pay eight months ago,” said Tom Cavallero of Auburn, an accessories vendor for Indian.
“I don’t know why anyone would believe that,” Joncich countered. Liabilities are no longer an issue for the brand buyer, he said. The winner in this new auction will not be responsible for any lawsuits or warranty claims, past or future.
Buyers paid $18 million for the Indian brand in 1998, according to former Indian vice president Fran O’Hagan.
Joncich said CMA will definitely pick a bid winner on June 29 but will not announce the winning bidder until after July 14, in order to give the bidder time to pay in full.
Indian, which billed itself as “America’s first motorcycle,” had its first incarnation from 1901 to 1953.
It was reborn in 1998 in Gilroy and produced motorcycles here until Sept. 19, 2003, when it closed its doors. Officials said the company needed more invested capital than its majority owner, the Boston-based Audax Group investment firm, could provide.
In October, CMA officials opened an auction for the company’s assets and said they wanted to sell the brand, real estate and inventory to a single buyer. Package deal bids, however, proved less satisfactory than selling it piece-by-piece. In January, Indian’s Tenth Street factory and its inventory were sold to separate buyers.
Since January, news of the brand’s sale has been confusing as CMA has negotiated with numerous potential buyers.
Bidders Rey Sotelo and Bill Melvin have said they were bypassing CMA for months and negotiating directly with Audax Group, but CMA estate manager Chuck Klaus maintained his firm was always running the sale.
Now it’s looking for new bidders, and some of Indian’s faithful are skeptical.
“At this point, I think everyone is baffled by this bidding process of CMA,” said Indian rider Ray Seidel of Temecula. “Some believe it’s time for the Indian marquee to just go into hibernation for a while after the botched job of this most recent incarnation.”
“CMA, like Audax, are clueless when it comes to the motorcycle business and have most probably killed off a legend,” Cavallero said.
“If it goes much longer, you can kiss Indian good bye,” said Ray Jensen, who closed his Indian dealership in Indian’s original home of Springfield, Mass. during the long wait for a new owner. “The 2005 Harley-Davidsons start arriving in showrooms in September. So do many other makes. When will new Indians arrive? … If the next guy that buys Indian misses the International Motorcycle Show circuit for 2005, which starts in Southern California in November 2004, they can forget it for a long time, if ever.”
Joncich responded by saying, “I guess the real test will be what we receive at auction for this brand.”
Peter Crowley covers public safety for The Dispatch. He can be reached at [email protected] or 847-7216.
