CENTRAL ISLIP, NY (BRAIN)—A judge has ordered the review of several years worth of documents from various parties who were involved with Iron Horse Bicycle Company before it went bankrupt earlier this year.
U.S. Bankruptcy Judge Alan Trust ruled last week that Iron Horse, its parent company World Wide Cycle Supply, CIT Group (Iron Horse’s secured lender), Dorel Industries, Randall Scott Cycle Company, several former Iron Horse executives and a third-party auditor hired by Iron Horse, turn over all correspondence dealing with Iron Horse.
The order requests a long list of documents including all financial statements, income statements and cash flow reports pertaining to Iron Horse from 2004 to 2008; all tax returns for Iron Horse from 2004 to 2008; documents pertaining to loans between Iron Horse and any secured creditors; documents pertaining to entities in which Iron Horse’s principals control or own more than a 5 percent interest and copies of leases or contracts between Iron Horse and those entities; and documents pertaining to the negotiation of Iron Horse or its assets for sale in the last three years, including a proposed private sale to Dorel Industries back in February.
The ruling stems from a motion filed by three unsecured creditors of Iron Horse who forced the company into bankruptcy back in March. At that time, Fairly Bike Manufacturing, Shenzhen Bo-An Bike Company and Acetrikes Bicycles—together owned in excess of $5 million by Iron Horse—asked the judge to direct the examination of the documents because it suspected that Iron Horse principals had illegally transferred assets out of the business and manipulated company books and records. The Asian suppliers also accused Iron Horse and CIT Group of attempting to sell the company to Dorel Industries without properly notifying the unsecured creditors in the case.
Judge Trust has given parties in the case anywhere from five to 15 days to turn over the documents to the suppliers’ attorney for review.
On Monday, a status conference was held in the case regarding the proposed sale of Iron Horse to Outdoor Cycle Group. For details on that hearing, read the July 1 issue of Bicycle Retailer and Industry News.