Cannondale ? Belly Up?

[knucklebuste]

Hey I heard a rumor that Cannondale might be going belly up? Can anyone shed some light on this? I already know that the motorcycle division is kaput, but was wondering if that affected the bicycle division to the point where it might not be around much longer. Knuckle

[pk]

Yes, things are looking very bad. They've locked the doors, changed the locks and can't publically speak about possible bankruptcy since they're publically traded. They've had a 15.4 million dollar loss.

Very sad. US bikes, northeast production and decent NEMBA supporter.....

http://www.bicycleretailer.com/bicycleretailer/headlines/article_display.jsp?vnu_content_id=1804453


pk

[turch]

Don't give up the ship yet (or that Gemini?). Say bye-bye to moto division and an attempt to reorg and retain the bikes. Worst case there are a few suitors (Lightspeed, TREK, & Colnago to name a few) that may be lining up to acquire the bikes, not that I imagine that Joe would really want to go that way.

(In case anyone care, dino-sore already tried to start a thread on this topic over the weekend.).

[pudding]

If the company is sold ... who is going to honor my lifetime frame warranty?

...I probably should go and buy some deraileur hangers.

[knucklebuste]

Yeah, stock up on the Cannondale parts and get those Gemeni frames looked at asap

[splat]

Cannondale Announces Plans To File Voluntary Chapter 11 Petition
(Bethel, CT - 1/27/03) Cannondale Corporation (Nasdaq: BIKE), has announced that it intends to file a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code on January 28th.

Cannondale and its lenders, The CIT/Business Credit, Inc. and Pegasus Partners II, L.P. have reached an agreement in principle that, subject to Bankruptcy Court approval, will provide the Company with interim financing to fund post-petition operating expenses and to meet supplier and employee commitments. "The interim financing will be used to continue the operation of our bicycle business," said Cannondale Founder and President Joe Montgomery.

Cannondale has also reached an agreement in principle with Pegasus Partners II, L.P. to sell substantially all of its assets to Pegasus Partners II, L.P. pursuant to Section 363 of the Bankruptcy Code, subject to better and higher offers and court approval. Pegasus would operate the bicycle business as a going concern with the involvement of current management and would purchase separately the Company's motorsports assets, including the intellectual property related to the design of Cannondale's motorsports products. In the meantime, management continues to work with other potential interested buyers for either or both of these businesses.

Because the Company has obtained interim post-petition financing, Cannondale will be able to pay vendors for goods and services received after the filing in the ordinary course of business.

Montgomery explained that difficulties with Cannondale's motorsports business made the filing necessary, and that the Company has determined to suspend operations of the motorsports division pending a potential sale. "The motorsports division was threatening the bicycle division," explained Montgomery. "Although we believe in the value of our motorsports products, we did not have sufficient financial resources to make the additional investments necessary. We look forward to bringing a renewed focus to our core bicycle business and to working through this present challenge with the greatest possible speed."

The suspension of operations of the motorsports division will mean that production workers who had been furloughed from Cannondale's motorsports factory in Bedford, Pennsylvania in December will not be recalled. Production workers at Cannondale's Bedford bicycle factory, who have been idled during a recent shutdown, are scheduled to return to work in the near future.

The Company's foreign subsidiaries are not included in the filing. Business done through Cannondale subsidiaries in Europe, Japan and Australia accounted for approximately 42% of the Company's total sales in fiscal 2002.

[knucklebuste]

I guess it sucks to work for Cannondale. Feel bad for all those people. They probably got a good severance package like a lot of the folks at my last job. Two weeks pay. F*ck'n nice ha? I can't stand greedy business-types. I'll crack their f'n head open. Greedy money hungry bastards. Too bad for cannondale. I always thought their ATV's looked stupid. Well hopefully they can somehow manage to keep the bike end of it afloat, and just maybee if they lowered their prices a bit people would buy their bikes. Then again the Gemeni 900 is a cool bike and thats $2100 bucks. I don't know what the f*ck I'm talking about anyway so don't even listen to me. I just hear people say they are overpriced. I'm happy with what I got so who gives a f right? Knuckle