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Despite what you may have read, MV Agusta isn’t declaring protection from creditors under Chapter 11 of the United States Code. But, we can understand the confusion.

Just so we are clear, by definition Chapter 11 bankruptcy proceedings are a figment of American law. Since MV Agusta is an Italian company, it would be fundamentally wrong to say that MV Agusta Motor S.p.A. was seeking a protection under the US Code that pertains to bankruptcy.

The branch of MV Agusta that would be able to file for Chapter 11 would be MV Agusta USA, but the US subsidiary is not embroiled in MV Agusta Motor’s financial troubles, which makes the use of the term incredibly inaccurate.

The report of MV Agusta declaring Chapter 11 first surfaced from Cycle World, which in all likelihood used the term “Chapter 11” as a quick way to explain to its American readership what was happening in Italy.

The reality is that MV Agusta’s “concordato in continuita” will function is some ways like a Chapter 11 bankruptcy, and in some ways not. This is a very complicated process, which we have already discussed at length in this article.

Like in a bankruptcy proceeding, MV Agusta is working with its interested parties to formulate a plan that will allow the motorcycle manufacturer to continue with its regular operations, which would entail the company’s creditors agreeing to new terms for their loans.

As such, MV Agusta’s debt would be frozen, giving the Italian company the breathing room it needs to restart its motorcycle production. However, production volumes will likely be scaled back, probably to 7,000 units, which means that MV Agusta will also be laying off some of its workforce.

The idea is that once MV Agusta is back on a stable footing, it will once again be paying back the €40 million it owes.

MV Agusta’s stakeholders still need to sign-off on the debt restructuring though, with the next meeting set for April 8th. We shall know more about the future of this iconic brand at that point in time.

Source: Varese News

  • Cimatti Angelo Giulio

    Well, I hope you’re true..Any case, “Amministrazione Controllata” is the waiting rooom of the Companys failure. So sad about that.

  • AHA

    A typical outcome in these unfortunate circumstances is for one or more of the owners to start a new company from the ashes of the old with most of the assets, half the workforce and none of the debts, leaving the creditors left to whistle. I’d like to think that AMG is careful enough of its image & its industrial relations with workforce and suppliers not to go this road.

  • michael uhlarik

    Jensen

    Let me, again, compliment you on your thoroughness. I laughed when I read those idiotic headlines, then read Corriere Della Sera to find out what was really happening. Thank you for being the one source of business clarity in this, um, industry.

    You are a precious resource.

    http://motori.corriere.it/motori/attualita/16_marzo_23/mv-agusta-rischio-fallimento-63afeeac-f0e2-11e5-9f30-007f8fe49766.shtml

    Please also note that young Castiglioni has elected to not show up for meetings with the unions, thus pretty much ensuring that the court in Varese will take over and place the workforce on Cassa Integrazione till its over. I am, again, sad to see this brand zombie suck more life and money from real people.

    https://it.wikipedia.org/wiki/Cassa_integrazione_guadagni

  • Superlight

    From the Media reports it appears young Castiglioni won’t confront reality – he was too concerned with short-term profits resulting from model proliferation and not concerned enough about the long-term – improving distribution (adding dealer points) so customers could actually see and purchase products. He needs a dose of humility, enough to bring in some business experts to help turn the mother ship around to a positive heading.

  • Bob Krzeszkiewicz

    Well, in Houston Texas, MV has moved out of the used car dealership they were being sold through and into Houston Superbikes, an actual motorcycle shop. So there’s one hurdle overcome.
    And they have a handful of MVs on the floor next to the Ducatis and Aprilias. They even have a white Turismo Veloce Lusso… something I’ve been wanting since it broke cover at the shows. Too bad the MVICS software is at 1.0 and not the advertised 2.0.
    But all this recent news is bad news. While I would buy the Lusso and upgrade the software later, being able to get parts from a company that has its hands tied is disconcerting. I’ve been down this street with Arilia and the Tuono about 10 years ago. Couldn’t get a new dash for 8 months. The least they could’ve done was extend my warranty 8 months to make up for the downtime.

  • Superlight

    I guess we’ll see just how tied their hands really are once this situation plays out. As an F3 owner I’m hoping for the best.

  • Cheers Michael!

  • Brandon Bruschke

    I have been waiting years to get my dream bike, ever since I first saw it. The F3 675. Haven’t had a good chance until the last week or so a used one with 2,000 miles showed up for less than $9,000. Suddenly this all comes out and I’m wondering if WHEN it breaks, will I be able to get the already hard to come by parts to fix it? I hope MV comes through, such a beautiful lineup should live on.