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Judge declines to approve sale of motorcycle company's assets

By Rick Romell of the Journal Sentinel
Dec. 14, 2015

A judge on Monday declined to approve the sale of the manufacturing assets of Erik Buell Racing to a liquidator, leaving open at least the possibility that the shuttered motorcycle maker might be started up again under new ownership.

Court-appointed receiver Michael Polsky had sought approval of the $1.6 million sale to Liquid Asset Partners LLC, which made the offer before an auction held Thursday. The auction, the second in the case, attracted no other bids.

But Walworth County Circuit Judge Phillip Koss, concerned that opponents of the deal didn't have enough time to submit objections, delayed a decision, online court records indicate.

Koss scheduled another hearing for Jan. 14.

Erik Buell Racing, which manufactured high-performance bikes, employed 130 people in East Troy until it ceased operations in April and filed for receivership, a state court proceeding similar to bankruptcy.

The firm's motorcycle design consulting business was sold last summer for $2.8 million to Hero MotoCorp., an India-based cycle company that in 2013 had acquired a 49% stake in Erik Buell Racing.

Shortly afterward, in early August, Polsky oversaw an auction of the company's manufacturing assets — machinery, tooling, and parts inventory, as well as accounts receivable and intangibles.

In the August auction, a firm headed by a New Jersey man, Bruce Belfer, agreed to buy the assets for $2.25 million. But Belfer twice failed to meet deadlines to close on the purchase, Polsky said in a motion filed Monday.

That paved the way for the second auction, held Thursday, where no one stepped forward with a bid challenging Liquid Asset Partners' offer.

The Grand Rapids, Mich., company buys equipment, tools and other assets of distressed firms and sells them off. Current jobs include the sale of equipment from the former American TV & Appliance stores. In 2010, Liquid Asset Partners handled the sale of tools and other hard assets of Buell Motorcycle Co., a predecessor to Erik Buell Racing.

Belfer was among those objecting Monday to the latest proposed sale to Liquid Asset Partners, online court records show. He could not be reached for comment.

Also objecting was Demetri Melekos, a Louisiana man who said in an interview that he wants to buy Erik Buell Racing and operate it on a reduced scale but hasn't had enough time to raise the money required. Melekos said he is chairman and an owner of a company, US Heritage Powersports, that produces chopper-type motorcycles, primarily for sale abroad.

Polsky's duty as receiver is to recoup as much money as possible for creditors by selling the business or its assets. There are about 850 creditors and other parties with an interest in the case, Polsky said in Monday's motion.

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