The situation around Erik Buell Racing is rapidly becoming comical, as the American motorcycle brand is headed back to auction, after its sale to Bruce Belfer failed to close.
The Milwaukee Journal-Sentinel reports that Erik Buell Racing will go back to the auctioning block on December 10th, because Belfer was unable to secure financing on his $2.25 million purchase price for Erik Buell Racing.
As has become the trend among Buell-loyalists, Belfer blames Hero MotoCorp for the failure of his deal to close. “They (Hero) went in before we closed and started to remove things, to the point where an entire warehouse was moved,” Belfer said to the Milwaukee Journal-Sentinel.
“I’ve done some tough deals in my career. But this was, in my opinion, intentionally complicated…” he added.
Readers will remember that Hero MotoCorp purchased Erik Buell Racing’s unfinished consulting consulting work and materials for $2.8 million, ahead of Belfer’s deal to buy the rest of the company.
It therefore wouldn’t be surprising to hear that the banks backing Belfer were securing their loan on assets that Hero ultimately ended up owning or taking. As a result, if the banks no longer had the collateral to secure their loan with Belfer, it would explain why they pulled the financing from him at the last-minute.
Despite all this, Belfer says he intends to bid on Erik Buell Racing again, at the December 10th date.
Of course, this gives another person or business the opportunity to bid against Belfer. We would guess though that the second auction price will be considerably lower than the first, making this perhaps a silver lining in the situation for Belfer and Erik Buell Racing.
We’ll know more in a couple weeks’ time.
Source: Milwaukee Journal-Sentinel