Shady business practices could save Vectrix

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New_Vectrix_LLC.jpgVectrix Corporation, the financially troubled manufacturer of electric scooters, has declared chapter 11 bankruptcy and has agreed to sell the majority of its assets, free of debt, to a new company, appropriately called “New Vectrix LLC.” The move comes after the company cut the majority of its workforce and failed to secure major investment or a government loan or bailout. Vectrix is said to be continuing production of the VX-1 electric scooter at its facility in Poland during all this, but could not be reached for comment. A press release follows the jump, it kind of boggles the mind.  >

MIDDLETOWN, R.I., Sept. 28 /PRNewswire/ — Vectrix Corporation (AIM: VRX) (www.vectrix.com),
a leader in Personal Electric Vehicles, announced today that it has
entered into an asset purchase agreement to sell most of the assets of
the Company to New Vectrix LLC (“New Vectrix”), a Delaware limited
liability company sponsored by GH Venture Partners LLC. As part of the
agreement, Vectrix has filed a voluntary petition for relief under
chapter 11 of the United States Bankruptcy Code in Wilmington, Delaware
whereby the sale of the assets, including its stock ownership of its
European subsidiaries, will be effected pursuant to section 363 of the
Bankruptcy Code. The assets will be sold pursuant to a sales and
procedures order that is anticipated to be approved by the Bankruptcy
Court to either New Vectrix LLC or to another buyer who is determined
by the Bankruptcy Court to have offered a higher and better bid for the
assets of the Company. During this process, the Company expects to
continue normal business operations consistent with its obligations as
a chapter 11 debtor-in-possession company under the jurisdiction of the
Bankruptcy Court. The Company’s subsidiary, Vectrix Poland Sp. z.o.o.,
will continue to produce the Vectrix bike and will provide customers
with accessories, spare parts and technical support.

Commenting on the sale, Mike Boyle, CEO of Vectrix, said, “This
transaction provides a platform to continue the Vectrix brand and its
advanced electric vehicle technology. We want to express our
appreciation to our partners and customers for their continued patience
and support during this transition.”

Terms of Asset Purchase Agreement

Under the Asset Purchase Agreement, New Vectrix LLC would purchase
substantially all of the Company’s assets and assume certain of the
Company’s liabilities through a supervised sale under section 363 of
the Bankruptcy Code. Providing New Vectrix LLC is the winning bidder
they have also agreed to extend warranty coverage on the Vectrix
vehicles previously sold to dealers and consumers up to a $2,000,000
cap for claims filed 60 days post-petition. The total purchase price
consists of a cash payment of $1,750,000 plus the assumption of up to
$3,306,000 in specified liabilities for a total purchase price of up to
$5,056,000, but is subject to higher and better bids, approval of the
Bankruptcy Court and customary closing conditions. The Company expects
to engage in a bidding process with other interested parties. Those
interested in submitting bids should contact John D. McGuinness, Chief
Financial Officer, at 401-848-9993 ext 103, or via email at jmcguinness@vectrixusa.com, as soon as possible as competing bids are expected to be due by October 27, 2009.

The Company’s report and accounts for the year ended September 30,
2008 will not be published before September 30, 2009. On that date,
trading on AIM in the Company’s securities will have been suspended
from trading for six months, and as a consequence of AIM Rule 41 those
securities’ admission to AIM will be cancelled with effect from October
1, 2009.

About Vectrix Corporation

Vectrix Corporation was formed in 1996 to develop and commercialize
zero-emission vehicle platform technologies focused on two-wheel
applications. The single focus of Vectrix has been to provide clean,
efficient, reliable and affordable urban transportation. Vectrix
Corporation has headquarters in Middletown, R.I., engineering and test
facilities in New Bedford, Mass., sales offices in the UK and a
manufacturing facility in Wroclaw, Poland.

via Brammo Fan

  • billy bob-ski

    i know there’s a polish joke in all that there legal mumbo-jumbo somewhere.

  • Ian

    Great strategy. Run up huge development bill, bust the company, shaft your suppliers and start again with a product ready to go and no development overhead. This sh*t should be illegal.

    • CafeRacer1200

      Yeah, by “green” they meant Benjamins

  • http://www.brammofan.com/ Brammofan

    It took me awhile, but read that “Terms” paragraph. They have to put it up for bid. Might be some excitement ahead.

  • Isaac

    Where the eSBK they were making F– the scooter!

  • http://greenvillescbankruptcy.com bankruptcy in greenville sc

    You lost me, buddy. I mean, I suppose I get what youre saying. I understand what you are saying, but you just seem to have forgotten that there are some other people in the world who view this issue for what it really is and may not agree with you. You may be turning away alot of people who might have been fans of your blog.