SE Bikes Parent Files Chap. 11 Bankruptcy

November 16, 2018 by  

Advanced SPorts Enterprises Files Chapt 11

Advanced Sports Enterprises (ASE) was formed two years ago, as a holding company for long-standing distributor, Advanced Sports, Inc. and the then-newly-acquired Performance Bicycle and Bike Nashbar retail operations. The company is owner to popular bike brands Fuji, Kestrel, and Breezer Bikes, as well as SE Bikes in the BMX world.

Today, the company filed a petition with the US Bankruptcy court in North Carolina, seeking Chapter 11 protection from creditors. Chapter 11 allows a business to continue operating while management reorganizes the finances and overall operation of the firm, in an effort to right the proverbial ship.

Chapter 11 is especially helpful for retail companies who need to shed burdensome real estate leases–which a company can then reject or affirm as part of their reorganization plan. This seems to be the case, at least in part, with ASE, as CEO Patrick Cunnane told “Bicycle Retailer and Industry News” (BRAIN): “When you look that the retail footprint of the business, it’s sort of a perfect candidate for reorganization under the protection of Chapter 11.”

People hear “bankruptcy” and automatically think of a company as “going out of business.” Liquidation is the Chapter 7 variety. Most of the time, companies emerging from Chapter 11 under a plan of reorganization are stronger and better-balanced than before the filing.

Cunnane went on to tell BRAIN “For us, it was not one thing. It was not the bank, not de minimis, not the landlords. It was just a combination of factors in a difficult environment and being undercapitalized.”

BMX News will monitor the case from time to time, and report anything that may impact the BMX community. For now, operations of the bike brands—including SE Racing—will remain on course.

—Mike Carruth