Large Scale Central

Condensed LGB Digest for May 7th - 13th

General Discussion
#1

Hi all,

Here goes:

May 7th Süddeutsche Zeitung

SDZ said:
[b] On the dead end track [/b]

…

The persistent rumours won’t go away, behind it (referring to the sale of LGBoA to G45, shortly before the insolvency) is Richter himself, who in that manner wanted to secure the marketing rights and at the same time get rid of the problems in Nürnberg. Assured is that LGBoA claims world wide rights - with the exception of Germany - and that they are using the www.lgb.de domain.

…


…

May 9th Nürnberger Nachrichten

NN said:
[b] The heart of many LGB employees is bleeding[/b]

Battle for survival of LGB taxes the nerves - growing criticism addressed to various parties.

Some are haggling about a few Euros; the others fight for their bare livelihood: In the struggle for the future of the insolvent LGB more questionable aspects are coming to the fore. At the same time many

employees face the most difficult time of their careers.

…


May 10th Nürnberger Nachrichten

NN said:
[b]Are the banks moving?[/b] [i] Roland Fleck views the banks as responsible[/i]

…

“If things go sour, the majority of the five lender banks will, in the main, be the parties responsible” explained Roland Fleck in case the venerable company should be without a future in Nürnberg.

…


…
May 10th Nürnberg City Hall

City Hall said:
................

LGBoA is now bidding for the company and the real estate, the bid is very close to the line of compromise which was arrived at during the discussions on April 16th at the Bavarian Ministry of Economics. For that reason the new offer should be acceptable to the banks from a business management point of view. In addition the new offer from LGBoA contains a projection for the preservation of 100 jobs at LGB in Nürnberg.

…


…
May 11th Nürnberger Nachrichten

NN said:
[b] Spectacular turn in "Case LGB"[/b]

former subsidiary LGBoA presents its own offer - jobs secure?

…

Pleasant for location Nürnberg: G45 apparently plans to retain the LGB factory along with at least 100 jobs.

…

Buffington tried at the same time to put an end to the persistant rumours that G45 are in truth owned by the ex-LGB owners Rolf and Johannes Richter: “We are friends” said the Amnerican " but I assure you the Richters have absolutely nothing to say at G45 or LGBoA."


…
May 12th GARTENBAHNprofi

GBp said:
.................

The Nürnberger Nachrichten reported in a supplement on May 11th, a further investor is taking part with the G45 bid; apparently an unknown US company which isn’t involved in the model railway industry.

Despite the “unknown”, Roland Fleck has appealed to the banks to consider the bid in an expeditious manner

#2

Hi all,

Added the Süddeutsche Zeitung 2007/05/07 item to the above.

The … indicate text before and after the section translated.

#3

to sum up the summation…

G45 has upped its bid to buy back what it already was a part of (didnt someone speculate about that?)

Still no FINAL decision by the banks

No one really knows what the hell is going to happen next.

IOW:

S.N.A.F.U.

:slight_smile:

#4

Victor-

My previous speculation was G-45 may be purchasing from themselves what they owned in the first place.
If they do make a purchase of LGB, then what did they own during the last 18+ months? If I am not mistaken, they have advertised with ad content that includes: LGB and LGB of America clearly in print. So this tells me they actually owned LGB (of Germany?); or thought they owned it; or operated as though they did own it; all until a court decision was made? Has one been made or is the option to buy simply understood that they did not own zilch?

Apparently, what is important is G-45 is making a purchase statement for LGB (of Germany) or for LGB of America, or both?
Or what is 'it" they are buying from what entity that can sell “it?” What is “it?”

Maybe they will simply favor willing to purchase the copyright LGB and the “right” to manufacture products in the U.S. for sale in the U.S., declining any other ownership. this plan may free them from legal restitution.

I have no idea. I find this chronology amazing.

My question: Why does a company have to purchase that which they have apparently been freely using under the advertised presumption (try Garden Railways magazine) that they ARE the LGB company of record? Anyone heard of a court order to cease and desist IF a company is operating in violation of another company’s purvue for product identity, manufacturing, and marketing? I have heard of nothing to this effect. If it was issued, the issuance was not made known on this site.

This is truly a conspiracy of confusion.

“Who is on first?”
“No, Who is on second, Why is on first.!”

Perhaps HJ has insights he will share in his weekly report.

Wendell

#5

Hi Wendell.
What we need are facts.
Speculation is counterproductive.
It is no better than the spin we have been getting for months from the vested interests.
Why they “Spin” I have no idea.

#6

Wendell,

Remember these dates:

March 1st 2006: G45 is incorporated in Delaware

Sept 8th: GardenRailways announces transfer of LGBoA from EPL to G45

Sept 18th 2006: EPL Patentwerk oHG files for insolvency

Dec 21st 2006: Hermann Schöntag is awarded the insolvency mass of above.

Feb 14th 2007: Anthony Castellano, President of LGBoA issues a press release which amongst other things mentions:

a) Hermann Schöntag is unable to raise the required funds

b) LGBoA owns all the marketing and distribution rights to LGB except for Germany.

Feb 16th 2007: Hermann Schöntag claims all the rights reverted back to EPL Patentwerk oHG when that company filed for insolvency.

The rest is recent enough that, in my opinion, it doesn’t need to be listed.

Right now:

a) The pool of banks have been asked to consider the offers which are on the table.

b) It has become public that one of the criteria on the previous bids was German ownership

c) It is also known that the banks rejected the Wöhrl/LGBoA bid on the basis of “not enough money”. This despite the “German” ownership etc. etc.

d) The informed sources (reliable or not) are putting the Kingsbridge/Märklin bid at between 9 and 10 million Euro. Märklin has German management, Kingsbridge is owned by the Hardt Group, headoffice in Vienna. CEO of Hardt Group is Dr. Mathias Hink.

Comment:

“d” sounds close to home with the financial and technical prerequisites -track record, track record and track record - to make sure that “things” work, or at least that’s how it looks from my vantage point!

#7

Fact:

S.

N.

A.

F.

U.

:slight_smile:

#8

Yes Vic,

And it didn’t start on Sept 18th!

#9

HJ-
Thanks for the chronology. In particular:
“On Sept. 8th, Garden RR announced the transfer of LGB of America from EPL (Correct: EPL is THE original German company?) to G-45.”

To me this statement makes the admission:
1 - EPL is acknowleged as having owned LGB of America, i.e. if they didn’t own it they couldn’t transfer it;
2 - EPL had the “legal right” to make the transfer i.e. bankruptcy was NOT known (established?) by the transferring party at the time the transfer (whatever that is) was agreed to – this presumes that LGB of America wanted a “transfer” (whatever that entailed);
3 - The transferring agency was an actual governing agent of EPL and had no conflicting motive in doing so with its investors;
4 - The “transfer” referenced was either by verbal agreement or was in writing and therefore can be (or has been) legally evaluated;
5 - If no money was exchanged, then what is the advantage to EPL or LGB of America to be independent from EPL, the German company? What were the advantages given to LGB of America’s staff? Are those same advantages present now? Are those advantages predicated on a prediction EPL going under financially?

Puzzled? Try this:
How can LGB of America “buy back” what was already legally given to (?) transfered to (?) them by the parent company?

OK, any takers?

Keep up the watch.

Wendell

#10

Wendell, even if every thing that’s been said so far is true, G45 would still need to buy the rights to use the name in Germany. They would still need to buy the right to manufacture in Germany. They would still need to buy the right to use the skills of those already employed by LGB in Germany. And most likely there are numerous molds etc that they would need to buy.

Also (MY OWN OPINION) I suspect that even though the Richters did not know that they were about to go bankrupt they most likely knew that they were on shaky enough ground that precautions needed to be taken to protect LGBoA just in case something did go wrong.

#11
Warren Mumpower said:
SNIP

Also (MY OWN OPINION) I suspect that even though the Richters did not know that they were about to go bankrupt they most likely knew that they were on shaky enough ground that precautions needed to be taken to protect LGBoA just in case something did go wrong.


I think you will find the Richters did know they were on less than solid financial ground. As I understand it, there was a bank appointed “observer”, “observing” what was going on at EPL for about a year before insolvency occurred.

Whilst I can’t quote German insolvency laws I do know that it is a criminal offence in Australia to trade when “knowingly” insolvent even if not actually declared insolvent.
Surely selling off some of the assets of a Company would be “trading”?
Also, I cannot imagine the laws are too much different in Germany. If they are different I would obviously stand to be corrected.

Now that appropriate questions are being asked in those exalted financial circles, perhaps the truth will out sooner rather than later.

As much as I would like answers to the puzzle(s) it will be the courts, no doubt influenced by high priced lawyers on all sides, who will make the decisions

#12

Tony,

You may have “hit the nail on the head”…
If there was a “observer” appointed by a bank…
What if he was doing more than observing…
What if he determined that they needed to sell LGBoA for the extra cash…
Is there a bank that fell “out of favor”…
After the sale is now history…

Hans-Joerg,

If the Kingsbridge/Marklin group has offered 9 to 10 million Euros…
If this is more than all the others…
Whats the hold-up??
Sale should have taken place along time ago…
Vic is correct!!!

#13
Bob Burton said:
Hans-Joerg,

If the Kingsbridge/Marklin group has offered 9 to 10 million Euros…
If this is more than all the others…
Whats the hold-up??
Sale should have taken place along time ago…
Vic is correct!!!


Bob,

In short: local politics.

City of Nürnberg is having a really hard time right now, lost about 2000 jobs just in the downsizing and closures that I’ve been reading about.

#14

Hmmmm.
Does “transfer” mean sale?
IF, I say IF, the Richters knew the business was, as Warren indicated “on shaky ground”, could not the word transfer simply mean an agreement to initiate design, production, and distribution inside the U.S.? In short, no money was moved, simply an agreement so income could be generated and IF the German company failed, the U.S. “version” of the company hopefully would have all the rights to the LGB label and production of LGB products under the LGB of America umbrella.

OK, here’s the last “IF”:

The transfer process – please note this is speculation of useage and outcome – therefore did not “legally” insulate LGB of America from the financial encumbrances of LGB of Germany BECAUSE the “transfer” is being debated as not a legal separation. Secondly, LGB of America could be debated as still LGB of Germany’s property and simply a brand name in itself or a division of LGB of Germany.

Here’s where Warren’s analysis makes sense: LGB of America, by “transfer” did not give them free production rights – therefore, LGB of AMerica would, in fact, need to make a financial agreement to get those rights from financially strapped LGB of Germany. To not get $ would likely be explosive to the creditors in Germany. If LGB of America is not getting claims against it by German creditors, it may be purposeful so as not give credibility to the idea LGB of America is an insulated and separate company.

Tony speaks for all of us: We will have to wait to know.

In the meantime, the analysis and speculation is great mental exercise.

Wendell

#15

Wendell,

The whole affair is, IMO, a bit “iffy”.

EPL insolvency announcement on their Scrapbook page said:
Ernst Paul Lehmann Patentwerk today announced that it was taking strong, immediate steps to prevent a hostile takeover of the family firm. Those steps include legal moves that should enable Lehmann to continue providing its quality products and services around the world.

“We do not believe that a hostile takeover financed by international bankers is in the best interests of our employees, representatives, retailers and consumers,” said Rolf Richter, Managing General Partner of Ernst Paul Lehmann Patentwerk. “Lehmann has been operating profitably, despite the severe problems in the model train industry, and we believe our family atmosphere is a very important reason for our success.”


The German announcement read quite differently and in there one would find the following:

LGB German Scrapbook said:
..............................

Mit der engen Verbundenheit an den Standort Nürnberg und der hier gefertigten Qualität, wurde 2004 die Fertigung bei der EPL-Tochterfirma in Tschechien aufgegeben und nach Nürnberg zurückverlagert. Der Erhalt der Arbeitsplätze in Nürnberg hatte Vorrang. Trotz dieser positiven Faktoren wurden durch die Finanzierer am 01.09.2006 nicht nur die Konten von EPL gesperrt, sondern auch ein Verkauf der Sortimentsartikel untersagt. Die Umsatz- und Auftragsabwicklung für das Gesamt-Jahr 2006 liegt im Plan.

HJ translates said:
With the close ties to Nürnberg and the quality produced at that location, in 2004 one ceased production at the EPL branchplant in the Czech Republic and repatriated it to Nürnberg. The preservation of the jobs in Nürnberg had priority. Despite these positive factors the banks didn't only freeze all of EPL's accounts on 01.09.2006, they also prohibited the sale of any inventory. The turnover and the orders for all of 2006 are within the projected plan.
My comment:

Very hard to believe that the banks would have frozen all accounts and prohibited any deliveries (wouldn’t they have to obtain an injunction for both??) if the “projected plan” was on target.

BTW the differences in content between the German and the English version of the insolvency announcement on the LGB Scrapbook got me interested in this “affair”, one too many of the gross discrepancies.

#16
Bob McCown said:
Dont you pay attention to what Ive been saying? Facts: OK, Wild speculation: Not OK.

SHUT UP about LGB, unless you have REAL information, no “friend of a friend” or “lookee over here” posts.

#17

Yes facts, like in my post that points out that there was no “IF” in regards to knowing! Straight quotes from the LGB website Sept 18th 2006!

#18

HJ, I think he was referring to Wendell’s speculation. Wendell, like myself, likes to exercise his brain matter once in a while by thinking freely…and outside the box. Part of the whole problem with this discussion (besides the snipping at each other) has been that some are afraid of free thought. :frowning:

#19

This saga makes the video game Doom look civilizied. I’ve read some good analysis of the possible ‘Transfer’ but if there was a Bank observer, how would the Transfer been tolerated without some renumeration? There could have been some shenanigans, secret deals etcetera… but really how would the banks have reacted to the secret deal… by shutting the firm down!!!..but I speculate!

Additionally, if the Kingsbridge offer is that much better, I doubt even the local politics could delay the situation this long the banks lose money every day they don’t close this out. Interst on 1.5 to 2 Million Euro is substantial even at sub prime day money rates which is what they are all about… but again I speculate!

Good luck all…

Mark

#20

Welllll, “Free thought” is a very dangerous concept! :wink: :slight_smile: That’s where non-conformity usually starts! :smiley: Next thing there is an inquisition or cord wood is neatly stacked to burn some witches. And the high priests of whatever “religion” have to mobilize their zealots to quell the cerebral insurrection. :wink: :slight_smile: :smiley: