Mag group files For Chapter 11

[redneckj]

This cant be good for the industry.

https://www.roadracingworld.com/news/motorsport-aftermarket-group-mag-files-for-bankruptcy-to-eliminate-300-million-in-debt/

 

[bigjohnsd]

Looks more like a Debt Restructure and Ownership shift. They claim suppliers and vendors will all get paid. No interruption in shipping to dealers. Friends in the industry are not surprised or concerned at the moment.

 

[Uncle Hud]

^^^^^ Agreed: debt for equity exchange. In other words, and with made-up numbers: "You owe me $300 million, and you can't pay it. I'll cancel the debt for 95% ownership of the company."

The press release goes on to say that employees, vendors, and suppliers will get paid, and that customers will see no interruption in fulfillment of orders.

Of course, everybody always says that when they take over a company ......

 

[08FJR4ME]

No matter how they play the wordsmithing someone is going to get screwed in the end. There's no free lunch. The dynamics say restructuring is coming whether you like it or not.

JMO

 

[bigjohnsd]

Inside sources say everyone will be paid. One of my friends is a vendor they owe money to, he's not worried.

 

[Bounce]

It's usually a matter of "new owner pays old debts in exchange for becoming new owner".

 

[Laser Dude]

Ever wonder how a company gets $300 million in debt without a lot of people driving the bus off the cliff being fired along the way? I can't imagine running a large company and having people reporting to me that put things in place to lose 100's of millions of dollars, and still calling a staff meeting with the same people saying "Okay, what's your next idea?".

I think at the couple million dollar mark, I'd be firing some of the people who put us there.

$300 million. Dang, that's a LOT of money to be in debt.

 

[BigOgre]

$300 million. Dang, that's a LOT of money to be in debt.

Eh, chump change.

 

[08FJR4ME]

Does the company name Enron ring a bell.

The only ones that will get hurt out of this deal will be the little guy. Mark my words.

Dave

 

[bigjohnsd]

Hedge fund owners are driving the bus, this one and many more.

 

[Laser Dude]

Hedge fund owners are driving the bus, this one and many more.

Well that's not reassuring. Because most success stories begin with "We were broke until a hedge fund group saved us, turned our company around, and now we're making more money than we can count", right?

Yeah, I don't ever remember reading that on a success story either

 

[08FJR4ME]

Case in point (General Electric) Their stocks went into the dumps. They now have a new CEO and he will be spinning off non profitable portions of the business and focussing on the ones that do make a profit.

Dave