From Tony Castellano, President of LGB of America posted on the garden Railways page “We learned today that Mr. Schöntag, the announced buyer of E.P. Lehmann, has been unable to secure bank financing to complete the purchase. Although we believe that another buyer or investor will be found, this is an extremely difficult situation for our many friends at Lehmann, and we wish them all the best”
Put your flack jackets on folks - I see an insurgent attack coming !
Now, we know the rest of the story…don’t we?
Yeah but drop the other shoe and consider the following:
"…However, LGB will live and thrive, with or without Lehmann. Here is the key: LGB of America owns the trademark and marketing rights for LGB for the entire world except Germany, and we are working hard to ensure that the production of LGB products – with all the quality you expect from LGB – continues long into the future.
There will be delays in announcing new products this year, but there will be new products … including a new American-prototype loco that we believe you’ll be very excited about. We do expect short-term shortages of some items, but we do expect to have ample supply of those items in the future. We’ll continue to ship from our warehouse in New Jersey, and we’ll continue to provide service from San Diego. In short, the LGB family has a new home … at LGB of America…"
That to me signals a paradigm shift in power as to who holds what now. I read this to mean that EPL/LGB of Germany, will be for only Germany and Europe as in effect a beautique manufacturer of pricey MIG products for them fussy Germans with a MIC paranoia. Where as LGBofA will serve the US and any other country with designed in the US, MIC products in American profile.
I only wonder if LGBofA is going to priceline their items closer to Bachmann and AC to be more competetive. I hope so, as I could never afford the fussy German stuff.
Just when it looked like it was safe to get back in the water!
This will bring out the jackals.
Run for the roundhouse Grandma, they won’t corner us there.
How do you say Lehmann in Mandarin?
JD
Ah, but the spin is?
Tell me, how different is it in Germany when you buy something?
Would you “buy” a new house, occupy, get all moved in and THEN find out you had no financing?
Bets are running high something was not “as advertised” in the sale.
We are now awaiting the translation.
Must be nice to buy a company, get moved in, announce you are moving your household to the city where the company is located, have press conferences, TV interviews, all the stuff…and THEN go looking for financing?
Really?
Okay, if you say so…
Sounds like the guy didn’t get the bank financing necessary to run the company.
I can think of at least 2 good candidates waiting in the wings for the European entity.
The “reliable sources” stated that Herr Schoonberg was loking for “upfront money” from buyers at the Nuremburg Toy Fair to fund the sale, after he got the “are you out of your mind?” reply many, many times, it was time to fold the cards. Oh yes, he did ask LGBoA for $700K…got the same response
Oh yes, there will be a North American factory…Watch the latest “reliable sources” news links…
Ya’ll come back now, Ya hear?
They’de be foolish to have a North American factory. They’ll use thier established designers and have production done at thier established manufacturers - yes -in China,
Just my opinion.
John Joseph Sauer said:I don't run the company....I just report the news.
They'de be foolish to have a North American factory. They'll use thier established designers and have production done at thier established manufacturers - yes -in China, Just my opinion.
Quote:How can there be enough business in Germany (ONLY) to support much if any of LGB's classic business?
. . . LGB of America owns the trademark and marketing rights for LGB for the entire world except Germany . . .
To use TOC’s house buying analogy, how about buying the house and moving in, then finding out that you only have the right to occupy it between the hours of 2am and 3am on odd numbered days. No wonder there is a problem finding financing!
I haven’t seen anything relating to how much the new American owners paid for LGBofA, but it appears they got enough of the assets (as in almost the entire world rights to anything LGB) to sink the German parent company. If the amount paid was anything bordering on reasonable, the American contingent appear to be great business minds, leaving little of value for the financial vultures (read “creditors”) in Germany. Makes one wonder where the original owners actually were and are in all of this. Are the Richters currently living in a luxury hotel in Pennsylvania?
Very interesting from a business and finance standpoint. I don’t think LGB Germany’s demise is healthy for the LS hobby, but it has little effect here as their gummi scale is of very little interest to my model RRing activities. Someone has already posted the idea that LGBofA’s promised American locomotive will be the (assumedly 1:22.5) K-27. If so, it is just more of the same. The poster didn’t mention what axis he expected to be 1:22.5 or what the scale(s) of the other axes might be. LOL!!
Happy RRing,
Jerry
Victor Smith said:
Yeah but drop the other shoe and consider the following:"…However, LGB will live and thrive, with or without Lehmann. Here is the key: LGB of America owns the trademark and marketing rights for LGB for the entire world except Germany, and we are working hard to ensure that the production of LGB products – with all the quality you expect from LGB – continues long into the future.
There will be delays in announcing new products this year, but there will be new products … including a new American-prototype loco that we believe you’ll be very excited about. We do expect short-term shortages of some items, but we do expect to have ample supply of those items in the future. We’ll continue to ship from our warehouse in New Jersey, and we’ll continue to provide service from San Diego. In short, the LGB family has a new home … at LGB of America…"
That to me signals a paradigm shift in power as to who holds what now. I read this to mean that EPL/LGB of Germany, will be for only Germany and Europe as in effect a beautique manufacturer of pricey MIG products for them fussy Germans with a MIC paranoia. Where as LGBofA will serve the US and any other country with designed in the US, MIC products in American profile.
I only wonder if LGBofA is going to priceline their items closer to Bachmann and AC to be more competetive. I hope so, as I could never afford the fussy German stuff.
Ahhhhhhhh, isn’t that interesting!
Since I don’t quote items that I can’t confirm, verify etc. I had to keep my mouth shut for a week and my fingers off the keyboard, alas…
I one time I was very tempted to post an item regarding what happened to my parents 61 years ago:
Bought a business, but not all the assets which were supposed to be included were included. For a simple reason, the seller didn’t own those assets.
I have been very busy this week teaching the kids how to ski, but I’ll check the German sources and see what hits the media.
BTW Hermann Schöntag not being able to arrange the financing is in my opinion a ruse. Everyone thanked the Sparkasse Nürnberg left, right and center for the support. Only a donkey would believe that the same bank didn’t extend the line of credit etc. to get things going.
Looks like Schöntag finally found out what wasn’t included - what happened to due diligence? - and decided that he wasn’t gonna be suckered.
Remember the sun hasn’t set on this deal, yet.
My thoughts: the ball is back in the insolvency trustee’s court, the banks could now very well insist that a new trustee be appointed since the present one
a) didn’t compile the list of assets correctly
or
b) didn’t rigorously persue all material/intellectual assets which had been pledged as collateral
or
c) didn’t disclose all that should have been disclosed.
BTW what I learned from that business experience of my parent’s 61 years ago: never take anything at face value, always ask the right questions (even if people can’t stand your guts!), double or triple check any of the answers you receive.
Of course that’s just me … but in 28 years running my own businesses the “unrecoverable” column stands at Can$ 300.00. 
Hans-Joerg Mueller said:Or 27 cents in Crappy Tire money.
... in 28 years running my own businesses the "unrecoverable" column stands at Can$ 300.00. :) :D
The Lone Railroader said:Marvin,
Now, we know the rest of the story...don't we?
Not so fast, the sun hasn’t set on this deal. It’s back to the insolvency court and I have a hunch - you heard and read of my hunches, haven’t you? - that the going will now get very interesting.
Chris Vernell said:Chris,Hans-Joerg Mueller said:Or 27 cents in Crappy Tire money.
... in 28 years running my own businesses the "unrecoverable" column stands at Can$ 300.00. :) :D
Whatever, point is I make damn sure that when I sell something I get my money and if I buy something everything is shipshape and as advertised.
Wan’t to hear the story what happened at Future Shop where I bought a laptop that wasn’t quite as new as advertised?? 
Even back then I wasn’t “too cheap” to call head office in Vancouver and outline the scenario.
Hans-Joerg Mueller said:The Lone Railroader said:Marvin,
Now, we know the rest of the story...don't we?Not so fast, the sun hasn’t set on this deal. It’s back to the insolvency court and I have a hunch - you heard and read of my hunches, haven’t you? - that the going will now get very interesting.
And you still don’t have the “facts” that I’ve had for two months…So yodel away…Tee…Hee
I would imagine that the Germans have the equivalent of what we here in America call “arm breakers.” I wonder when they will be let loose?
This is more fun than watching TV!
madwolf
Wheeeeeeeeeee…!! Spin Time…!!!
Hans makes a reasonable speculation: LGB is pushes the message the buyer has problems with funding while the buyer MAY have a discovery action against LGB for contractual non-compliance. Sure, LGB may be secluding the message the buyer is challenging he is not getting what his money was intended to buy.
The LGB saga is still a good read.
Thanks to all who contribute the translations – and accompanying analysis.
Wendell
This whole thing will really start to get dangerous if some court decides to reverse the sale of LGBoA. If that doesn’t happen, then I forsee LGBoA becoming LGB by default. It appears that the current LGB is nothing more than an empty shell with a name and not near enough assets left to warrant the continuation of the original parent company. With it gutted of most of it’s value due to the sale of LGBoA, LGB could be forced into liquidation. The courts could auction off the remaining LGB(of Germany) and LGBoA picking up the rights to sell in Germany for a song.
We shall see how the mop flops…as I said earlier. Watching this unfold might be almost as much fun as playing with trains 