CENTRAL ISLIP, NY (BRAIN)—Pacific Cycle has asked the judge in the Iron Horse bankruptcy case to throw out an eleventh-hour offer for Iron Horse from Kent International, a New Jersey-based bicycle company that sells primarily in the mass market.
Kent International submitted a bid for $2.8 million on July 9, the last day bids could be accepted, according to documents filed in federal bankruptcy court. The offer indicates that Kent has already put down a $100,000 deposit and would pay an additional $2 million at closing. The final $700,000 would be paid in installments over two years.
An auction to sell Iron Horse’s assets is scheduled this morning at the federal courthouse on Long Island.
Kent’s bid is slightly higher than that of Pacific Cycle, which has offered $2.75 million for the company.
Pacific Cycle is disputing Kent International’s bid and has asked the judge to disqualify the offer, saying it does not meet the standards established by the court. Pacific claims that Kent’s bid does not abide by a provision that the cash component of the bid not be subject to financing; that the bid was not accompanied by a statement of Kent’s financial qualifications; and that the bid was submitted several hours past the deadline of 2 p.m. EST on July 9.
A hearing will be held one hour prior to this morning’s auction to decide whether Kent’s bid will be accepted.
Outdoor Cycle Group, a company owned by Randall Scott, the son of Iron Horse president Cliff Weidberg, is also vying for Iron Horse’s assets. Outdoor Cycle bid $800,000 cash, a three-year note worth $1.2 million and a percentage of royalties from licensing the Iron Horse trademark over the next five years.
Check www.bicycleretailer.com on Tuesday for an update on today’s auction.