Hobbico files for Chapter 11 Bankruptcy.

[WoodiE]

Well this is certainly something you don't like hearing, but Hobbico is filing for Chapter 11 Bankruptcy.

Hobbico distributes over 150 brands and 30 proprietary brands that include Arrma, Axial, Flyzon, Futaba, Great Planes, Dynamite, and many more.

Hobbico announced today that we are filing for restructuring under Chapter 11 of the Bankruptcy Code and that we are pursuing a process to sell or restructure the company. It’s important to know Hobbico will continue to operate the business throughout the bankruptcy process. Numerous companies across a range of industries (automotive, airlines, etc.) use this type of filing as a tool to get costs under control, create stability and build platforms for growth.

Hobbico intends to use the bankruptcy filing and a possible sale of the business to reduce our debt, restructure our liabilities, attract new investors and position the company for future growth. We carefully evaluated this vs. a number of other actions and concluded this was the best path forward.

I understand that this may be difficult news to hear. Hobbico is one of the largest U.S. distributors of radio-control and general hobby products and our business has many strengths. At the same time, Hobbico has faced and continues to face many significant challenges.

 

[olds97_lss]

Are they the primary distributor for any major brands?

Nevermind... just checked their wiki.

https://en.wikipedia.org/wiki/Hobbico

The company distributes over 150 brands of hobby products including about 30 proprietary product brands. Proprietary brands include: Axial, ARRMA, Dromida, Team Durango, dBoots, Revell, Monogram, Top Flite, Great Planes, AquaCraft Models, FlightPower, Heli-Max, SuperTigre, O'Donnell Fuel, Duratrax, RealFlight, MonoKote, Carl Goldberg Products, ElectriFly, Coverite, Dynaflite, Flyzone, MuchMore Racing, LiFeSource, Tactic, VS Tank, Estes Industries, Proto-X, TrakPower and others. It is the exclusive distributor for Futaba radio control products in North and South America, for O.S. Engines in North America and HPI Racing, Italeri, Novak Electronics and Nine Eagles in North and South America.

 

[robmob]

List of companies related to this that have also filed for Chapter 11 protection include:

Estes
Axial
Great Planes
Revell
United Model
Tower Hobbies

 

[slowngreen]

All because @robmob quit buying rc stuff. Guarantee it.

 

[cbaker65]

Hobbico is a brand all in their own ,they are like a hardware store for all hobbies an dabble into every thing ,
from electrical stuff to tools ,nuts & screws an everything else that has anything that moves on land ,sea ,an air!

Its hard to believe that they are folding!....

 

[robmob]

https://www.pacermonitor.com/public/case/23446531/Tower_Hobbies,_Inc

 

[WoodiE]

Its hard to believe that they are folding!....

Not folding, filed for chapter 11.

 

[WoodiE]

In the latest news it seems Horizon Hobby is placing a bid to buy a large part of Hobbico.


Hobby-product distributor Hobbico has found a buyer for its remote-control business: cross-town competitor Horizon Hobby.

Horizon Hobby has agreed to buy several units of Hobbico for a combined $18.8 million, subject to an auction scheduled for Wednesday.

"We believe this transaction, if completed, will further strengthen Horizon's position as the market-leader in the RC industry," Horizon Hobby President and CEO Joe Ambrose said in a statement. "Horizon and Hobbico have served many of the same retailers and customers for years. Upon completion of this transaction, Horizon will work to provide a smooth transition within the industry."

Hobbico filed for Chapter 11 bankruptcy protection in January with the goal of finding a buyer.

"Acquiring and incorporating Hobbico's RC business with Horizon allows us to further strengthen our organization so that we are well-positioned to grow and meet the future needs of retailers and customers," Ambrose said. "It is unfortunate that Hobbico's financial position forced it to seek bankruptcy protection, but this transaction will result in a strong organization with the resources to expand and prosper."

If completed, Horizon will be buying Hobbico's Great Planes and Tower Hobbies divisions, as well as brands including Axial and Arrma. Hobbico had been asking for at least $22 million for these companies.

The purchase won't include Estes, United Model, Revell US or Revell Germany.

Additionally, "Horizon will not be assuming any of Hobbico's debts or other liabilities in this transaction," Ambrose said.

Following the auction, where Horizon would be the stalking-horse bidder, the purchase would close April 6.

In separate court filings Friday, Hobbico said it had reached a $6 million stalking-horse purchase agreement with a corporation called Estes Industries LLC for its Denver-based Estes subsidiary.

The auction had originally been scheduled for this coming Monday in Chicago and was moved to Wednesday in Delaware.

The two-day delay is "just a matter of process efficiency, as there are certain filings that need to take place the day before (Tuesday) in Delaware, and this eliminates travel to Chicago for an auction the following day," said Howard Salazar, human resources director for Hobbico.

He was unable to comment on the purchase agreements.

With a stalking-horse bid, the potential purchasers essentially set the floor bid of the auction in exchange for certain protections.

For example, if Horizon Hobby isn't the successful bidder, it will receive a break-up fee of 3 percent of its base bid, or $540,000.


Both Hobbico and Horizon Hobby are among the top 25 employers in the county, according to the Champaign County Economic Development Corp.

Last year, Hobbico, one of the largest hobby product distributors in the country, said it had 415 employees in the county, and Horizon Hobby reported 341 employees.

Hobbico was formed in 1985, when Clint Atkins combined Don Anderson's Great Planes Model Distributors and Bruce Holecek's Tower Hobbies.

Horizon Hobby, founded in 1985 by Rick Stephens, was sold to an investment group in 2014. It has more than 700 employees around the world, including in California, France, Germany, the United Kingdom and China, according to its website.

News article link

 

[Rolex]

Good to hear that deals are being cut to save what's most important. Estes is the company that builds the rockets. Been there, done that. They should make them radio controlled so we don't have to hunt for them.

 

[WoodiE]

Judge has OK'ed the purchase of Hobbico by Horizon!

CHAMPAIGN — A bankruptcy court judge approved Horizon Hobby's $18.8 million purchase of Hobbico's remote-control business Monday, which means Hobbico employees must reapply for their jobs at Horizon before the purchase is completed Friday.

Hobbico's more than 300 employees were made aware of this possibility last week, after Horizon was the lone bidder in a bankruptcy auction for Hobbico, which filed for Chapter 11 protection in January with the goal of finding a new buyer.

"As mentioned in yesterday's Town Hall Meetings, Hobbico employees who are interested in being considered to work at Horizon Hobby are required to apply online," Hobbico human resources manager Megan Huppert wrote Friday in an email obtained by The News-Gazette.

It's not clear how many of the employees will be hired at Horizon, especially since the two Champaign-based hobby-product distributors perform similar tasks.

"Horizon and Hobbico have served many of the same retailers and customers for years," Horizon CEO Joe Ambrose said when his company announced it would try to buy Hobbico's RC units.

Horizon is buying Hobbico's Great Planes and Tower Hobbies divisions, along with its Axial and Arrma brands.

Also on Monday, a bankruptcy judge approved a separate $7 million sale of Hobbico's Colorado-based model-rocket subsidiary, Estes, to an organization called The Langford Group.

An auction for Hobbico's remaining assets — including United Model, Revell US and Revell Germany — was temporarily suspended last week.

Hobbico employees will be applying for jobs in departments at Horizon rather than specific positions, and a temp agency is helping Horizon process the applications.

"Due to time constraints with hiring/reviewing/interviewing 300+ employees, Express Employment is assisting Horizon with the recruitment process," Huppert wrote. "Employees who are selected to work in the Distribution Center could start on Saturday, April 7th through Express Employment."

If employees apply by Friday, their seniority with Hobbico will be used to determine when they're eligible for benefits.

However, "If you apply after the close of the transaction (April 6th), you would be considered a new applicant and treated like any other external candidate," according to a document attached to Huppert's email.


"We will review the applications and get in touch with candidates with whom we are interested in moving forward," the document said, later saying: "We plan to interview as many people as we can, but given the short time frame prior to closing, we will not likely be able to interview everyone."

A representative for Hobbico could not be reached for comment Monday, and a representative for Horizon said the company would issue a statement after the sale closes.

The two companies were both formed in 1985 and are among the top 25 employers in the county, according to the Champaign County Economic Development Corp.

Last year, Hobbico said it employs 415 people in the county, and Horizon Hobby reported 341 employees.

source: http://www.news-gazette.com/news/lo...s-horizons-purchase-hobbicos-rc-business.html

 

[Rolex]

Another big company gets even bigger. Buying the competition means they will be raising their prices. On the bright side we will still be able to get whatever we need.

 

[WoodiE]

Well it looks like Horizon Hobby and Tower Hobbies is making progress... just seen this on the Tower Hobbies website. Looks like Tower Hobbies is even going to be part of the Horizon RC Fest this year!

 

[olds97_lss]

Holding my breath while I wait for Arrma parts and trucks to start production again. Really want an outcast.

 

[wacmartin]

Another big company gets even bigger. Buying the competition means they will be raising their prices. On the bright side we will still be able to get whatever we need.

Well this is true, let's remember that Traxxas had a minor role in this indirectly with a frivolous lawsuit against Arrma. They also did the same thing to HPI, and HPI is still recovering. It's still hard to find certain HPI parts in Canada!
There's threads on different forums about this and it's a pretty shady move about how Traxxas does it. It really is hurting the hobby and I will not be purchasing another Traxxas product again. The 4x4 Rustler does look nice though.

 

[olds97_lss]

The 4x4 Rustler does look nice though.

What? There's a 4x4 rustler now? How'd I miss that?

 

[WoodiE]

What? There's a 4x4 rustler now? How'd I miss that?

Man can't a guy take a long weekend anymore!?!

Enjoy more Rustler 4x4 news, https://www.rctalk.com/forum/threads/traxxas-introduces-new-rustler-4x4-vxl.114876/