Large Scale Central

Holy Crap. LGB files for German bankruptcy protection-hostile ta

General Discussion
#1

Just read this on the MRR forum, nothing was on the GR forum, fixed that…

first notice:
http://www.trains.com/TRC/CS/forums/907400/ShowPost.aspx#907400

also here:
http://www.mylargescale.com/forum/topic.asp?TOPIC_ID=41522

text from MMR reprinted;

"It looks like E. P. Lehmann may be in for a bit of a rough ride over the next few months, but the good news is that the difficulties shouldn’t affect product availability. Here’s the story we’re about to post:

E. P. Lehmann Patentwerk, manufacturer of LGB trains, today filed for financial protection in a German court. The protection was sought because their bankers had called Lehmann’s loans due in an effort to force a sale of the firm to an investor favored by the bank. As part of the same effort, the banks had prevented Lehmann from shipping finished goods to its customers, including now-independent LGB of America. (Shipments of LGB trains to LGB of America from other suppliers had not been affected.)

“We’re happy they (Lehmann management) have taken aggressive action to protect the company from a hostile takeover. We believe they will begin shipping from Germany again this week. We have plenty of product in our U.S. warehouse and are shipping as normal,” according to LGB of America’s David Buffington.

Buffington added, “The LGB brand has tremendous value around the world, and no one is going to let that get away.” – Terry Thompson

Thanks for reading MR, Terry…"

_______________________________________________________—

This sucks, I hope it works out for the best. Its like something out of the 90’s “Wall Street” movie bullcrap…

#2

Hi all,

Nice bit of spin from a person who has more than just a passing interest in the LGB line!

Of course we have read plenty of fluffy snow jobs in Kalmbach publications - can’t get the scale right and have no idea of how things compare against the prototype!

OK let’s give this a bit of counter spin.

Anyone who attended the 125th celebrations and saw the wholesale disposal of goods, documents, etc. etc. and had half a brain knew what was up! Unless of course your relationship with EPL/LGBoA is less than arm’s length.

Those who are interested can get a list of who was at the 125th!

Now let’s get to the details:

Has anyone ever heard of an instance where a supplier or several suppliers will repossess unpaid goods just prior to a declaration of insolvency?

Has anyone heard of a company announcing the change of ownership of a fully owned subsidiary almost 5 months after the actual change, but just prior to filing for insolvency?

If these, together with a lot more other indications, point to a hostile takeover - would you believethat my mother was a Swiss paratrooper? Quite unlikely since the Swiss never had any, let alone female ones.

When I talked to one of my many German friends quite a few weeks ago, I mused that it would not surprise me at all if LGB ends up in the hands of Dr. Rene Wilfer of PIKO. I haven’t changed my mind on that hunch, but it is only a hunch. My friends reaction was: “You must be kidding!”

No, I wasn’t! I’m just a “dumb Swiss-Canadian” with a tendency to keep my ears open and my eyes peeled. That’s the only way I ever learned anything. :wink: :slight_smile: :wink:

PS One more thing on the hostile takeover, the very first thing that target will do is talk to his backers, banks and any other financial institutions, next are companies that one has an association with i.e. one’s suppliers etc.
Soooooooooooo what do you think??

#3

Just waiting for the “Rare…Irreplaceable” postings to pop up on evil bay.

Wait a minute…Sounds like a good plan…Giddy Up, Mule

My ship has done come in!!!

#4

HJ does this mean our LGB trains just became more valuable ?

#5

An interesting development I must say …

If another company does end up with the business, I wonder how that would effect warranties and parts ?
I know a new company would want to keep good relations but obligations are at the front line and we have the same bit with the airlines going bankrupt and then ending all retirement bennies or cutting them way back…

I only have LGB disconnects and they are not going to need anything so I’m in the clear…

Might be interesting watching eBay for LGB sales/auctions ?

Stay tuned,

#6

My Amfleet cars… :o

Warren

#7

Warren

The Amfleet cars are made in China…LGBoA spun off from LGB Germany as of April of this year.

So there is hope for your cars, yet.

The Lone Railroader

#8

Oh come on Hans…I’m sure she looked lovely in uniform :slight_smile:

So what does all this mean?

…might just be the PERFECT excuse to run out and buy a new Forney!

#9

Just remember there is a BIG difference in US and German bankruptcy proceedings.

The “spin” we’ve all seen plays to our understanding of the process.

Be very careful in fully understanding all you read…

and note, that the “release” while mentioning the former parent company has no quotes from them at all.

#10

“and note, that the “release” while mentioning the former parent company has no quotes from them at all.”

I am with you on this - as I said earlier in another forum - it is going to get worse before it gets better.

#11

A thought ?

If LGB was in good financial condition, why do they owe the bank so much that they had to file bankruptcy to keep the company in private hands ? Hmmmm …

Maybe they made a bad business decision along the way and it bit them the rear ?

Same station different time,

#12

Excellent considerations:
1 - What happens to service IF LGB is absorbed by X company?
2 - What will be the role of LGB of America?
3 - What will be the outcome per pricing of current stock held by TrainWorld, St. Aubins, Ridge Road, and Charles Ro, etc.? These, I think, are the major players.

Has anyone a relationship with any of the major dealers willing to discuss the status of LGB per what they have been told and what they know that affirms said information?

Finally…
If LGB were not to exist, what then for the hobby in general?
If subsumed by, say, PIKO, would there be any anticipated changes in LGB of America, the product line, service, and pricing?

Wendell

#13

…Don’t worry, lads…Mikey from MTH is in the wings waiting to make his move, with lots of Yen from HK…the German Banks just have to squeeze a bit more and he moves in…gives them a bunch of Yen, and then has a new toy shop…remember he has/had a good Chinese connection…

#14

Korean.

#15

I said elsewhere that its been apparent that Bachmann and AC have been hurting LGBs bottom line for years now…

LGBs stubborn attempts to maintain the “prestige and exclusiveness” of the product line and name, is IMHO why they are now in trouble, they appeared to ignore Bachmann for years and disregarded AC and USA as inferior products. Well it seams that even though “inferior” they sure sold well! So much so that poeple would rather have the 'inferior" yet affordable over the “prestige and exclusivity” of LGB, In doing so they painted themselves into a corner. Only now have they released two items ( Genesis and Forney) at a comparable pricepoint to Bachmann or AC. Too little, too late?

LGB makes a dam good product, so does Maserati, doesnt mean I’m going to take the bus till I can afford one though…not when there lot of options that are “almost” as good. I think this is a pretty close analogy.

#16
Victor Smith said:
I said elsewhere that its been apparent that Bachmann and AC have been hurting LGBs bottom line for years now...

LGBs stubborn attempts to maintain the “prestige and exclusiveness” of the product line and name, is IMHO why they are now in trouble, they appeared to ignore Bachmann for years and disregarded AC and USA as inferior products. Well it seams that even though “inferior” they sure sold well! So much so that poeple would rather have the 'inferior" yet affordable over the “prestige and exclusivity” of LGB, In doing so they painted themselves into a corner. Only now have they released two items ( Genesis and Forney) at a comparable pricepoint to Bachmann or AC. Too little, too late?

LGB makes a dam good product, so does Maserati, doesnt mean I’m going to take the bus till I can afford one though…not when there lot of options that are “almost” as good. I think this is a pretty close analogy.


Vic et al,

First and biggest mistake LGB made: They never made any mistakes! Or at least that’s what they would have us believe.

The premium one pays for their product includes good service and so it should. The past few years have produced enough goof-ups that people had to make full use of the repair service. Only the most rabid of the Red Box Brigade didn’t understand the implications. Anyone checked on the current turnaround times in San Diego as of late?
I just read a report from a German LGB club who visited LGBoA this summer and bemoaned the changes witnessed.

And then there is the infamous arrogance of knowing everything and of course knowing everything better. A typical display must have been the editorial in one of the recent Depesche mags in which the editor berated the “nay sayers” aka rivet counters, scale obsessed and various other “titles”. Basically people like myself and plenty of others who dared to ask if you say it is 1:22.5 scale shouldn’t it be 1:22.5 scale. Or for that matter if you say it is 1:29 scale what are all the measurements from 1:25 through 1:32.
I will try to get a copy of that Depesche, it will be well worth the time to translate that editorial as one more example what ails LGB.

And another miscalculation is the “We do our own Standard Gauge” thing. Well, only people with a set of dimension correcting glasses wouldn’t notice the difference between the 1:29 of Aristo and USAT and the 1:27 rubber amalgamation of LGB. Or perhaps one or the other reviewer who isn’t all that familiar with the prototype (what prototype?) and perhaps figured that it was just a hobby and most, if not all, of the wares are toys.

Ever set a LGB F7 beside another F unit from the competitors? Notice anything?

It will be interesting to see how all of this is sorted. The people I feel sorry for are the design and production personnel, marketing and top management sure handed them the sh… end of the stick!

#17

Hans

Yes theres more going on than meets the eye here. I think I’ll keep my conjectural piehole shut about what may or maynot be going on in Stuttgart…and just watch the trainwreck unfold, as Joan Crawford said…“fasten your seatbelts, its going to be a bumpy ride”

#18

I’ll bet Lewis Polk is laughing his butt off. LGB almost ran Aristocraft into bankruptsy over the track fiasco back in the early 90’s. So Aristo survived…and LGB eats dirt.

Warren

#19

I’m wondering just who really owns the rights, and plans for the Genesis, LGB, or G45. I’d like to know just what all WAS included in the sale…and Jack Lynch is veeeeeery silent at the moment.

Warren

#20
Victor Smith said:
Hans

Yes theres more going on than meets the eye here. I think I’ll keep my conjectural piehole shut about what may or maynot be going on in Stuttgart…and just watch the trainwreck unfold, as Joan Crawford said…“fasten your seatbelts, its going to be a bumpy ride”


Not much going on in Stuttgart, plenty of action in Nürnberg. The matter is being handled by Amtsgericht Nürnberg - Insolvenzgericht. A trustee with wide ranging powers has been appointed as of 14:00 Nürnberg time on Sept 18th 2006.

Interesting times ahead!

Addendum:

I just read your post on GR, then it clicked :wink: :slight_smile:

LGB has issued two press releases in Germany, I saved a “HTML with images” copy of both, I’ll provide the translation of the German version tomorrow morning. Then everyone can compare that text with the English text and marvel at the differences!
Trust me it won’t be the inadequacies of my translation, fluency in English and German sees to that! :wink: :slight_smile: Mind you, there are times when I’m almost speechless at the audacity of certain people.

As always, don’t touch that dial.