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Erik Buell

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Social media and some assorted motorcycle news websites (first here, and now here) are feverishly reporting that Erik Buell Racing has been out-right acquired by Hero MotoCorp, during the company’s receivership auction, thus confirming the wet-dream conspiracy theories of Buellistas around the world.

The report was first started by the stalwart news source Motorcycle.in.th, and was then elevated quickly into the realm of semi-truthfulness by a bevy of other news outlets.

Sources close to Buell and Erik Buell Racing have since come forward and discrediting the report, calling the story a complete fabrication. Meanwhile, Hero MotoCorp stock has risen 0.50% on the news.

With the journalistic bar now set so low, Asphalt & Rubber feels comfortable reporting that there is indeed a new owner for Erik Buell Racing, but it is not Hero MotoCorp, but instead the Flying Spaghetti Monster — deity to the Church of the Flying Spaghetti Monster.

After shutting its doors, and putting the company into receivership, the legal process for Erik Buell Racing is moving right along, with a date now scheduled for the sale of the company’s assets.

Slotted to take place on July 21st, potential buyers will be able to bid on EBR’s assets, in bulk. All winning bids are of course subject to court approval, which will be granted/not granted quickly after the auction, on July 23rd.

The bar isn’t set particularly high when it comes to the motorcycle media’s coverage of complex business issues, nor would you really expect it to be. The majority of my colleagues are more likely to have amateur or racing licenses, rather than MBAs or law degrees. Fortunately for A&R, I’m not an accomplished motorcycle racer.

It therefore didn’t surprise me last week that the headlines regard Erik Buell Racing ranged in their proclamations from the more accurate “ceased operations” to “gone bankrupt” – with the even more presumptive publications proclaiming the ultimate demise of the American brand.

This comes from a lack of understanding about how the receivership process works, which my European colleagues should have a stronger grasp of, as the concept is more prevalent across the pond.

As such, I would like to explain the issue further, and how it applies to the situation facing Erik Buell Racing. To entice you on what will surely be a boring subject to many, this doesn’t spell the end of Erik Buell Racing…not even close.

Posting on the EBR Facebook page, Erik Buell has made the closest thing to a press statement about the company’s cesasation of operations and pending receivership.

First thanking fans for their support, the EBR CEO goes on to explain that the company took on too many tasks for its limited resources, which in-turn has caused EBR to excede its abilities and acquire massive amounts of debt (reports put the figure at $20 million).

Buell hopes to see EBR through the receivership process, and to “maximize the value from EBR to benefit all”. In typical Buell fashion, he leaves the possibilities for the future open. You can read the full statement after the jump.

News being broke by the Milwaukee Journal Sentinel says that Erik Buell Racing has ceased its operations. The East Troy company plans to also file for protection from creditors under Chapter 128 of Wisconsin’s bankruptcy code.

Under Wisconsin law, EBR will be placed into receivership (the company will be run by attorney Michael S. Polsky), and ultimately bids will be made on purchasing the bankrupt company. If no bids are made, the company’s assets will be auctioned off, with the profits going to EBR’s creditors.

Despite an abysmal year in the World Superbike Championship last season, Team Hero EBR will return to the WSBK paddock for 2015. The team’s return is perhaps in name only, as major changes have been made to EBR’s WSBK presence, which will continue to be based out of Italy.

Most notable is Team Hero EBR’s new riders — Larry Pegram and Niccolo Canepa — with Pegram having double-duties, as he will act as the Team Manager in charge of the Pegram Racing crew, which will take over running the Team Hero EBR program.

Heavily teased, we now know that Erik Buell Racing will debut its EBR 1190RX sport bike in mid-October, at the AIMExpo in Orlando, Florida. Tipped to be a more affordable version of the Erik Buell Racing 1190RS, the 1190RX has been spotted with a seat for a pillion, has an uber-aggressive headlight, and will likely come without its premium suspension, wheels, and braking components.

“This is the culmination of decades of dedication, innovation and teamwork,” said EBR Founder Erik Buell. “We have been working to create a pure rider’s machine and a true world brand. From the heartland and the heart of America, these are extraordinary motorcycles that discerning riders everywhere will be passionate to own.”

A plethora of Indian Financial publications are reporting that Hero MotoCorp has bought a 49.2% stake in Erik Buell Racing for $25 million. Hero MotoCorp is India’s largest two-wheel manufacturer, and for a year now has partnered with Erik Buell Racing for technical development, as well as sponsoring the American company’s AMA Pro Road Racing team for the past two seasons.

Today’s news confirms numerous rumors we have heard about the Hero investing in EBR. Acquiring only 49.2% of Erik Buell Racing, Hero has only a minority stake in EBR, and while we cannot confirm the information, we would imagine that the odd 49.2% ownership was done to keep Erik Buell as the majority shareholder in his company.

If the American motorcycle brand was still in business, this year would have been the Buell Motorcycle Company’s 30th birthday. Treated more like a line on the cash flow sheet to its parent company Harley-Davidson than a true self-supporting motorcycle brand, Buell motorcycles suffered from not being “Harley enough” for the Bar & Shield devout, and conversely wasn’t adopted by the non-believers because of its extensive compromises with the Milwaukee brand.

Still, in its 27 years, Buell Motorcycles managed to build a cult following of riders, though the numbers in its ranks were never enough to make the brand truly profitable. With Harley-Davidson facing dire straights during the recent economic depression, the company circled the wagons around its core assets, and closed the doors to Buell Motorcycles in the process.

The ethos of the brand continues with Erik Buell Racing though, which soon after its creation released the EBR 1190RS superbike — a race-ready motorcycle that isn’t too dissimilar from the Buell 1125R sport bike. We still don’t know what the future holds for Erik Buell’s new company, though a bevy of models are on his company’s product road map. We think if you polled a few former Buell owners, they would want to see this poster (full-size after the jump) updated.

It has just been announced that Erik Buell Racing has received $20 million in funding from foreign investors. A part of the federal government’s EB-5 program, the deal was brokered by FirstPathway Partners, a company that specializes in facilitating the funding of companies through wealthy individuals that are abroad. The announcement is a boon for EBR, as the company has struggled for financing since it began operations after the closing of Buell Motorcycles by Harley-Davidson.

The $20 million in funding will go towards building more affordable models, says the Milwaukee-based company. In turn, this news means that Erik Buell Racing will need to bring on more staff, and expand its facility for production at a greater volume (54,000 square feet says Buell). Erik Buell Racing hopes to start selling $20,000 street bikes once it gets its business in order for larger volume, with the expectation being that those models will be similar to the EBR 1190RS, though without such high-spec components.