RF Update 4/24/06

Ron Earp

Admin
RF Update 4/24/06

To my knowledge the Administrators investigating Roaring Forties held a meeting today to determine the fate of the company and what actions should be taken from this point forward. Based on what I have been sent Roaring Forties entered into liquidation via vote of creditors and the company will not be returned to Robert Logan. In fact, the company assets have been listed for sale for quite some time and now have offers on them, to what amount we do not know. It appears the assets will be sold off, the Administrators and secured creditors paid, and then any money left used to pay unsecured (all the depositors) creditors. There is no possible way this can really amount to much money due to the large sum of unsecured creditors and the relatively low value in comparison of Roaring Forties' assets.

It is still undetermined if Robert Logan will be investigated personally, or held personally liable for the situation. The information I have been supplied with indicates that investigations are still pending but it appears the company was trading while insolvent in June of 2005. I don't know what the Australian definition of "trading while insolvent is" but I imagine it is a simple debt/load calculation. And, my understanding of Australian law is that if a company director is found guilty of trading while insolvent they can be held responsible and/or be charged as a criminal. Clearly, I don't understand all the ins and outs of Australian liquidation, bankruptcy, and ramifications of such, but that is the jist I get from talking to the Administrators some weeks ago and our attorney. I imagine this will take some time to play out.

In fact, I imagine that all of this has a fairly long time to go before it reaches an end. I know folks on the forum are tired of reading about it, just as I am tired of thinking about it, writing about it, and talking to people on the phone about it. But, as I read on a forum not too long ago, Life comes down to a few moments and this is one of them. I sure won't forget it!

Ron
 

Peter Delaney

GT40s Supporter
Hi Ron,

I heard from one of the Oz bidders that the administrators were planning on announcing a decision regarding the sale within the next few days (although it will take a few weeks to get contracts sorted out, etc).

My understanding is that at least 2-3 of the bidders intend to re-start RF asap, & that the business will have to be relocated as a result of some problems with the previous lease.

My fingers & toes are all crossed for a re-start outcome, rather than an asset-stripping exercise !

Kind Regards,

Peter D.
 
I would also much prefer to see a re-start, although I can't help but wonder how much of the tooling, spares etc. "walked off," both in Australia and in South Africa. Roaring Forties made a damn good product.
 

Alex Hirsbrunner

Lifetime Supporter
[ QUOTE ]
...just as I am tired of thinking about it...

Ron

[/ QUOTE ]
Amen Ron - my feelings exactly! /ubbthreads/images/graemlins/beerchug.gif

Best Regards,

Al
 
After following the recent events on the board regarding the collapse of Roaring Forties, I just wanted to offer my sympathies to all whom have been affected by this fiasco... My heart goes out to those of you, who in the course of pursueing your dream, lost your money/deposits/desire/enthuiasm all because of an unscrupulous manufacturer operating beyond his means/ability, without giving a moments thought to the end result.

I wish there was something more I could say. It's just absolutely stomach turning...

What a shame.

mardyn
 

Ron Earp

Admin
Hi Peter,

My understanding is that if the assets are bought and RF is re-started it has no bearing on affected customers. I mean, the new owner might choose to call his new GT40 business Roaring Forties, or not, but it has nothing to do with the old Roaring Forties. The new business is not indebted to old customers and the asset stripping has indeed happened - the old Roaring Forties was liquidated and sold off for pennies on the dollar. Maybe Robert will be working for the new owner, who knows?

I can't see that a new owner would want to take on debts of the old company, and, they are not required by law to do so either. The magnitude of the debts would cripple a fledgling company starting out in what I think is going to be a tough marketplace, at least from an international standpoint.

Australia is, unfortunately, on the other side of the world. With so many offerings from the UK/US that are available I don't think many US/UK customers will again so easily do business with a company that far away. It is unfortunate that this is the case, but that is my estimation based on emails I've received about the issue.


Flying across the US takes about 6-9 hours with connections, actually more than a flight to the UK from the East coast, so relatively speaking these trips are "local". Not so getting to Australia from the US or UK, where getting there takes longer than a day.

When I first got my GT40 from RF Australia I didn't know what a risk I was taking - Roaring Forties was not actually incorporated until months after I sent my deposit! But, things were different then and I think Robert was different too in the way he handled things and did business.

So, we shall see how this thing all plays out. I heard the same things you did regarding offers and decisions and have received communications from some of the folks sending the offers. Amounts are low and there will be very little left over for creditors, that much is certain.
 
Ron

I agree...but assuming the new owners are content to serve just the local market, I would think they could be sucessful. I get the impression there is sufficient GT40
demand down under to keep more than one maker in business.

And if the new owners can supply parts/advice to all RF
owners, that's certainly a good thing. Not exactly what
those with deposits want...but I guess good for RF owners
who already have their kits.

MikeD
 

Ron Earp

Admin
Hi Mike, agreed, and I hope I wasn't too negative in the post. There appears to be a lot of demand in OZ and for sure a savvy manufacturer can keep busy. I just don't think they should assume the US/UK market is wide open for them because it'll take time to win respect back, a lot of time, and just a couple of cars over here from the new company won't do it.

With respect to existing cars I wonder how many of them there really are. When I met with Hershal a while back I think we enumerated 10-12 running cars in the US, plus about an equal number under construction. So, let's say 25 in the US. There are only two in the UK, and I don't know how many down under.

I was told by one person close to the factory that the numbers were not what I thought they were. So, looking at chassis 108 didn't mean there were 107 chassis before it. In fact, he suggested that many numbers had been skipped, some in blocks, and there were probably half as many cars out there as one might think. I don't know how many are running around Australia so it is hard to know. As for parts supply, there may not be that many RF cars out there as we once thought.

Anyhow, I'm sure the new owner can do fine in Australia where the name didn't seem to take a hit. I only know of one affected Australian customer and some customers were supposedly taking their partial built cars and kits out of the facility some time before all of this went down. Understandably, they are not vocal about happenings lest they get caught up in all of this stuff.

Best,
Ron
 

Pete McCluskey.

Lifetime Supporter
Ron, I don't think there is enough demand for GT40's in Australia to support one manufacturer let alone two.
Anyone buying the RF assets would I assume be hoping to continue to attract buyers from other countries. Which as you point out, may be difficult.
DRB for instance, do not depend only on GT40 orders, but also manufacture Cobra's with which they are very successful,both within Australia and offshore.
 
If I were an existing GT40 kit car manufacturer, buying the assets of RF would be one way of eliminating the competition.
 
Pete

I never "assummed" the new owners would make GT40s only.
They could be a Cobra maker, a boat builder, or a
basic auto shop...all looking to branch out.
I guess we'll find out pretty soon !

MikeD
 

Tim Kay

Lifetime Supporter
Here's a wild thought (possibly already voiced):

If, (RF), purchased at a fraction of the value, then for no other reason but for company image, build customer loyalty and establish good will, new owners make good to previous deposited customers (purely as a start up cost investment) Maybe there is hope for those that lost out. Strangers things have happened, eh?
 

Ron Earp

Admin
I don't think it would work. I had a couple of people contact me, nice people, who inquired along those lines - that is, to get the parts and try and service the debts. But, it'd simply take far too long to pull off and the new owners would work for free for many years. The debt is too high.

Some of these prospective owners thought there were a lot of RF cars out there to which they could sell parts. When the reality of it is there are probably not nearly as many as we were led to believe. If you were to read the forum from say 2003 to mid-2005, you'd almost think there were 100s of these cars in existance since that is about all you read about. Now with the information I posted above and some others undoubtedly knew, there might be less than 50-60 of these cars worldwide. Net result, not much in the way of a parts business.

There is nothing wrong with the car, in my opinion. Surely someone could get the bits and start producing GT40s for the Australian market, but as Pete says is there enough business for that? I thought there was, but, on the other hand, why was Robert so keen to get into NA/Europe - maybe not enough buyers in OZ?
 
Obviously there are more potential buyers in NA/UK
than in OZ alone...so selling worldwide made sense.
It's the way Robert went about it that was the problem.

The "new" owners of RF may indeed offer to sell to NA/UK,
but as you mentioned, the shadow of RF will make that
a difficult road to travel. Still...time has a way of
changing things. In a few years who knows what will happen.

MikeD
 

Doug S.

The protoplasm may be 72, but the spirit is 32!
Lifetime Supporter
Ron and Mike, I agree with you. I had a somewhat similar experience with the Schwinn Bicycle company. Their bicycles are represented to have a lifetime warranty, yet when I contacted Schwinn about a bicycle that needed warranty replacement they told me that the current Schwinn company had bought the name only and that the bankrupcy paperwork specifically stated they did not need to service any warranty requests for bicycles made by the old Schwinn company. Well, needless to say, I did not buy a new bicycle from the "new" Schwinn; rather, I did spend quite a bit of $$ buying a different brand. The "new" Schwinn's attitude cost them my business, plus any business from anyone else I could convince to take their business elsewhere.

There may eventually be a "new" RF, but they would need to have quite a different attitude from the "new" Schwinn company for the GT40 community to embrace their offerings, I suspect. Yet, as they say, time heals all wounds, and if they can remain solvent for long enough they might start selling to the US market again. How quickly we forget!

BTW--I see Schwinn bicycles all over the place, so my exercise of my free enterprise rights to do business with whomever I choose appears to have had little effect on Schwinn's survival. Still, I felt better then and still do, so for what it is worth--my advice to anyone and everyone I can get to listen is to NEVER buy anything, however inconsequential, from Schwinn! I suspect that there are many out there who would give their friends the same advice about buying from RF.
 

Alex Hirsbrunner

Lifetime Supporter
Dang Doug, looking at it that way, I'm out about 320 crappy $100 Schwinn bicycles courtesy of Roaring Forties! /ubbthreads/images/graemlins/blush.gif /ubbthreads/images/graemlins/grin.gif
 

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Ron Earp

Admin
I'd take the bikes now. At this point I only have two Roaring Forties keychains to show for efforts, each valued at $18,500. You want to buy one, I'll let it go for $15000 even.
 
I just rang the administrator and they are still considering bids for the company with a decision expected by the end of next week.
 
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