SEATTLE (BRAIN) — Rad Power Bikes filed for Chapter 11 bankruptcy protection Monday in advance of completing a sale of the company and less than a month after it said it could not afford a recall on some of its older lithium-ion batteries that the Consumer Product Safety Commission deemed unsafe.
Filed in the U.S. Bankruptcy Court for the Eastern District of Washington, Rad Power Bikes listed estimated assets at $32.1 million and estimated liabilities at $72.8 million. Its inventory of e-bikes, spare parts, and accessories is listed at $14,226,874.73.
Top unsecured claims are:
U.S. Customs and Border Protection for tariffs ($8,363,749), Bangkok Cycle Industrial Co. Ltd. ($5,353,674), Jinhua Vision Industry Co., Ltd. ($1,414,356), and Fuji-TA Fushida Group Area ($1,223,881) for trade; Commerce Insurance ($1,138,000) and Lisa Gore ($3,200,000) for subrogation; Steve Jay ($1 million) and Susan Luck ($1 million) for damages.
Equity holders are founder Mike Radenbaugh (41.3%), VCVC V LLC (6.6%), Durable Capital Master Fund LP (5.8%), along with other minority holders (46.3%).
"Rad Power Bikes has navigated an extraordinary period of challenge and change, even as our riders and community have continued to show up for us in powerful ways," a Rad Power spokesperson told BRAIN. "As we work to secure a sustainable future for the Rad brand, Rad has filed for Chapter 11 protection as part of a process to complete a sale of the company within the next 45-60 days.
"This step allows us to keep operating in the ordinary course of business while we pursue the best possible outcome for the people who rely on Rad every day. Our goal is to keep the company intact and preserve the relationships we have built with riders, vendors, suppliers, and partners.
"We are not giving up. We remain deeply committed to our customers and community, and we are focused on doing everything we can to strengthen the future of the Rad brand. We are grateful for the continued support of our riders, vendors, and retail partners as we work through this moment and toward what comes next."
The CPSC issued the warning because it said the lithium-ion battery on some older models can unexpectedly ignite and explode, especially when the battery or harness has been exposed to water and debris. Rad Power Bikes did not agree to "an acceptable recall," according to the CPSC, and the brand told the agency that given its financial situation, it can't offer replacement batteries or refunds to consumers.
In early November, Rad Power told Washington state officials that it would possibly lay off 64 employees in January and could shut down if additional funding is not secured.
It's been a dizzying downfall for the brand that in October 2021 announced a $154 million financing round that brought its total investment amount to $329 million since its inception in 2007. Since then the brand has had several personal liability lawsuits, layoffs, and management changes.
