HOONIGAN $1.75 Billion bankruptcy

[Apparition]

 

[deadbeat son]

@jjvw - you may be able to buy a sticker cheap when they start liquidating.

 

[jjvw]

@jjvw - you may be able to buy a sticker cheap when they start liquidating.

Already have this one on order!!!

 

[LukesfirstJeep]

How in the hell does a company get $1.75 Billion is debt? Why didn't they pull the plug after $1.75 million?

Google is my friend. Hoonigan was more than Gymkhana videos.

The recent history of Hoonigan is quite complex. After operating independently for many years, it merged with Wheels Pro in September 2021, a company that designs and sells aftermarket wheels, tires, and accessories. Wheels Pro has been owned by private equity firm Clearlake Capital since April 2018 and between that time and its merger with Hoonigan, acquired Gorilla, ReadyLift, MHT Luxury Allows, ZBroz, and TSW.

After merging with Hoonigan, the company acquired Throtl, Teraflex, and 4WP, before being rebranded as Hoonigan. A bankruptcy filing reveals that while revenue grew from $844 million in 2019 to $1.5 billion in 2022, it started to fall in 2023.

 

[deadbeat son]

Already have this one on order!!!

That's cool and all, but doesn't quite rise to the hoonigan quality threshold.

I am going to order this one, on account of the fact that my Jeep is slow and I used to be in the Air Force of course...

 

[InOmaha]

How in the hell does a company get $1.75 Billion is debt? Why didn't they pull the plug after $1.75 million?

Google is my friend. Hoonigan was more than Gymkhana videos.

That sounds like some sort of rich people tax dodge conglomeration. Saddle a company with a bunch of other companies loaded down debt, then the new debt company declares bankruptcy. I wonder how many were spinoffs of other companies and what people were on the boards of all of them.

Buyouts and bankruptcy. Then some new company swoops up the straglers that can make money for pennies on the dollar.

It's like shorting stock but with companies. Bonus if the new company has stock your friends can short too.

 

[DuckNut]

That sounds like some sort of rich people tax dodge conglomeration. Saddle a company with a bunch of other companies loaded down debt, then the new debt company declares bankruptcy. I wonder how many were spinoffs of other companies and what people were on the boards of all of them.

Buyouts and bankruptcy. Then some new company swoops up the straglers that can make money for pennies on the dollar.

It's like shorting stock but with companies. Bonus if the new company has stock your friends can short too.

You are very close. They buy companies and convince a bank to refinance their operation. Now they start stripping that assets and the balance sheet looks like crap. Then they strip the remaining assets and the company is left with no assets, only debt.

Because they were so far in debt the banks are very willing to work with them because a huge loss like that is going to hurt the bank.

If you are only $1 million in debt you will be foreclosed on in a heartbeat. If you are $800 million in debt you will get special treatment because you are strangling the bank. The more debt you have the more control you have. That is, until a small creditor comes knocking for their money.

 

[JEEPSTEVENANAIMO]

wheel pros just pushed all their debt into hoonigan. plain to see.

 

[jjvw]

You are very close. They buy companies and convince a bank to refinance their operation. Now they start stripping that assets and the balance sheet looks like crap. Then they strip the remaining assets and the company is left with no assets, only debt.

Because they were so far in debt the banks are very willing to work with them because a huge loss like that is going to hurt the bank.

If you are only $1 million in debt you will be foreclosed on in a heartbeat. If you are $800 million in debt you will get special treatment because you are strangling the bank. The more debt you have the more control you have. That is, until a small creditor comes knocking for their money.

Private equity firms ruin everything.

 

[DuckNut]

Private equity firms ruin everything.

They certainly have those optics.

I would bet they are filing bankruptcy and trying to raise another couple hundred million in new capital...claiming it will help them reorganize. But then they will steal that and 2 years later be right back here.

 

[jjvw]

They certainly have those optics.

I would bet they are filing bankruptcy and trying to raise another couple hundred million in new capital...claiming it will help them reorganize. But then they will steal that and 2 years later be right back here.

Yes. PEFs have those optics because this is what they do to create those optics. We don't need to pretend or deflect from what they so often are doing.

 

[DuckNut]

Yes. PEFs have those optics because this is what they do to create those optics. We don't need to pretend or deflect from what they so often are doing.

I agree with the PEF's and I don't agree with them.

As a PEF, your job is to increase value to your shareholders. As long as the laws allow stripping the assets and dumping the rest at fire ssle prices, this activity will continue.

There are some good firms out there. There are also a lot of shysters ad well.

 

[bucky]

A PE bought out several Beekeeping Suppliers several yrs ago and they went all to shit quickly. All they care about are $$$$. Look what happened to Sears.