CENTRAL ISLIP, NY (BRAIN)—Iron Horse Bicycle Company may have been auctioned off in bankruptcy court, but the controversy surrounding the company’s demise continues to mount.
Three days before Iron Horse was auctioned to Dorel Industries, Iron Horse and its former president Cliff Weidberg asked the judge to investigate the business practices of East Coast Cycle Supply and its founders Jeff Bruno and Josh Kohn. East Coast was started by a group of nine former Iron Horse employees shortly after Iron Horse closed in late January.
The parties allege that while Bruno was still employed with Iron Horse, he took steps to misappropriate Iron Horse’s license agreements with K2, Columbia, Jeep and Realm for the benefit of his new company. Iron Horse and Weidberg also claim that Bruno took assets including laptop computers, files, bike frames, warranty parts and cell phones, and continued to access Iron Horse’s bank accounts online and use the information illegally after leaving Iron Horse.
Other accusations leveled against East Coast employees include collecting unemployment charged against Iron Horse while employed full-time with East Coast; engaging in an online campaign to discredit and harm Iron Horse and Weidberg; servicing Iron Horse warranties and keeping the payment for East Coast; and using Iron Horse trade secrets to conduct sales of bikes to Iron Horse customers like Sport’s Authority and Dick’s Sporting Goods through an arrangement with Ming Cycles, a former Iron Horse supplier.
Bruno said he could not commit on specific allegations in the court filing due to legal obligations, but did say that the claims have no merit.
“This appears to be Mr. Weidberg’s latest attempt to deflect focus and responsibility away from him and his company’s demise. Now it seems his new targets are the very employees who were loyal to him, who were there until the end trying to keep the company afloat under his direction. We will comply with whatever the court instructs and we look forward to putting an end to these issues,” Bruno said.
Iron Horse is asking the judge to issue an order requiring Bruno and Kohn appear for examination and produce documents detailing communication between East Coast employees and a number of industry retailers and factories such as Ming Cycles, Sports Authority, Dick’s Sporting Goods and Fairly Bike Manufacturing.
The request is scheduled to be presented to the judge for an order on July 23.