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The future of Revell Germany...

January 13 2018 at 3:31 AM

Spencer Pollard  (Login spencer2)
HyperScale Forums
from IP address 86.164.236.158

Hi everyone!

Over the last few days there has been plenty of chatter regarding the future ownership of Revell Germany. Last night we were sent a press release laying out their position - here is the release in full...

https://thekitbox.wordpress.com/2018/01/13/revell-germany-reaffirms-continuity-and-solidity-of-overall-business-operations/

Spence happy.gif

 
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Larry Engesath
(Login ReccePhreak)
HyperScale Forums
68.1.34.118

Thanks for that info...

January 13 2018, 7:40 AM 

Glad to hear they will still be producing their fine quality products.

 
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bobby in npt
(Login skankosis)
HyperScale Forums
71.161.226.224

TY, nice to see more than opinion...n/tt

January 13 2018, 9:04 AM 


 
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tomcervo
(Login tomcervo)
HyperScale Forums
23.116.165.29

Sad but true

January 13 2018, 9:52 AM 

When something new comes from Revell, it's from RoG. US Revell seems to be reduced to nothing but re-pops. And even the RoG re-pops are better.

 
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Russ Taylor
(Login VMA131Marine)
HyperScale Forums
73.17.93.100

I am more convinced than ever that the Hobbico BK filing

January 13 2018, 10:07 AM 

Is a vehicle to ditch its obligations to its ESOP holders. Hobbico is an employee-owned company so all its employees get tax advantaged contributions of stock in the company. The catch is that when an employee leaves or is laid off (and Hobbico has laid off a lot of people over the last couple of years) they are entitled to a payout of the value of their ESOP shares 60 months after their termination date. Hobbico failed to make scheduled payouts from the ESOP at the end of 2016 and the share value plummeted by 80%. I did some digging and discovered that in 2015 the total value of shares in the ESOP was $70 million with 700 holders of shares for an average value per person of $100,000.
In the bankruptcy, claims of the ESOP holders are subordinate to all other creditors. Assuming Hobbico finds a buyer, the ESOP shares remain with the bankrupt company and the shareholders get whatever is left after all other creditors have been paid. Hobbico just received permission from the bankruptcy court to access $70 million in debtor-in-possession financincing to keep the restructuring going and find a buyer. This financing is senior to all other debt the company has and, presumably coincidentally, is about the same as the ESOP valuation in 2015. The sale of the company will also free it from the ongoing investigation by the Federal government into mismanagement of the ESOP.
So my guess is that Hobbico is sold and survives in some form, although maybe it won't remain in Champaign, IL, but spare a thought for the 700 or so current and former employees who are going to see a good chunk of their retirement savings wiped out by this move. Note that, like stocks in 401k's, ESOPs are not covered by Federal government pension guarantees.

 
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Max Bryant
(Login takenname1)
HyperScale Forums
24.14.224.207

Sounds typical of big business since the 90's

January 14 2018, 11:14 AM 

Whatever happens the employees take it in the saving of or making the company profitable. How many companies have hurt those people who are depending on their pensions and 401K and ESOPs for retirement That's the crime right there and the federal government should protect against it. My phobia has always been to be weeks from retirement and something like this would happen. Then what do I do to survive? Would you want your 68 year old mother,father, grandmother, grandfather working the midnight shift at Walmart for minimum wage. And if you're not in good enough Health to hold a job any longer your SOL.....
Max Bryant

 
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Mike Dassele
(Select Login MidwayJunkie)
HyperScale Forums
72.195.236.142

It's nice to see something other than..................

January 13 2018, 11:49 AM 

"the sky is falling" (it seems to be for the employees in the ESOP) There will be something appear to fill the void if Hobbico goes away.

 
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Russ Taylor
(Login VMA131Marine)
HyperScale Forums
73.17.93.100

The sky very well could be falling if you are a current employee,

January 13 2018, 12:40 PM 

As you might lose your job and a large fraction of your retirement savings, or a former employee who was not able to cash out your ESOP shares. Companies don't work without the people who staff them so we might be happy that Revell survives, but that is going to come at a cost. The average loss could be as much as $100,000 per employee and, from personal experience, I know most of them are making $12, $13, $14 per hour.

 
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Mike Dassele
(Select Login MidwayJunkie)
HyperScale Forums
72.195.236.142

I think I alluded to that......................nt

January 13 2018, 12:47 PM 


 
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Russ Taylor
(Login VMA131Marine)
HyperScale Forums
73.17.93.100

The sky very well could be falling if you are a current employee,

January 13 2018, 12:40 PM 

As you might lose your job and a large fraction of your retirement savings, or a former employee who was not able to cash out your ESOP shares. Companies don't work without the people who staff them so we might be happy that Revell survives, but that is going to come at a cost. The average loss could be as much as $100,000 per employee and, from personal experience, I know most of them are making $12, $13, $14 per hour.

 
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Russ Taylor
(Login VMA131Marine)
HyperScale Forums
73.17.93.100

The sky very well could be falling if you are a current employee,

January 13 2018, 12:41 PM 

As you might lose your job and a large fraction of your retirement savings, or a former employee who was not able to cash out your ESOP shares. Companies don't work without the people who staff them so we might be happy that Revell survives, but that is going to come at a cost. The average loss could be as much as $100,000 per employee and, from personal experience, I know most of them are making $12, $13, $14 per hour.

 
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Mo
(Login IronChefMoFo)
HyperScale Forums
68.146.128.60

It's a press release. Even if the sky IS falling, do you think they'd tell you that?

January 13 2018, 3:29 PM 

If you're feeling reassured, it's because the press release did its job. The entire purpose of a press release is to put a positive spin on news in an attempt to calm market concerns. Of course they're not going to say "the sky is falling".

If the sky was literally falling, they'd say that they were looking forward to the exciting opportunities for growth that the new reduced-sky environment provided, and that they intended to maintain the same high quality of care and support in spite of the challenging times.

There isn't anything factually incorrect Revell's press release, but if you strip away the spin and gloss all they actually say is that, as a subsidiary, their day-to-day operations are not currently affected, so they will continue to operate normally until the effects of the bankruptcy filter down to them.

Which... is pretty much what we knew before the press release.

The concern isn't that Revell is bankrupt. The concern is what creditors or potential buyers will do with Revell (and other subsidiaries) to pay off Hobbico's debts. Which is why they buried that bit at the bottom of the press release - "the sale of Hobbico could have future implications for Revell-Germany." To be fair to Revell, nobody knows what will happen. But those concerns don't cease to exist simply because they've released a positive-sounding press release.

After all, it's a press release, not a legally binding document.

 
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Steven "Modeldad" Eisenman
(Login samodeldad)
HyperScale Forums
108.20.209.251

not really. The press release is the art of non-speak

January 14 2018, 9:27 AM 

Even Hobbico, under Ch. 11 will continue. Ch. 11 is protection from creditors so as to be able to reorganize. If Hobbico sells itself, Revell of Germany goes along as a subsidiary, unless spun off. Which it was at one time. If Hobbico is forced into Liquidation under Ch. 7, RoG will be up for sale as an asset.

The unmentioned issue is the extent to which RoG was profitable, self-supporting, or receiving funding from Hobbico. If it was receiving funding, those funds may be cut off, and the fund would remain in the US, and RoG would be short cash.

There is too much unknown to known what will be. The best one can hope for is that RoG is strong financially and that it has some of the modeling assets. But in the end, RoG can be, and most likely will be sold either in a reorganization sale or liquidation.
"Another day older and deeper in debt"
Merle Travis.

 
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steven eisenman
(Login samodeldad)
HyperScale Forums
108.20.209.251

Very good that Revell Germany is a free standing German company. I

January 13 2018, 5:50 PM 

It could be complicated, and I don’t have an answer, but I wonder if it has the cash to buy some of the parent’s assets
"Another day older and deeper in debt"
Merle Travis.

 
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<Mike
(Login ga1424)
HyperScale Forums
65.130.48.95

Vague and to the point...

January 13 2018, 10:00 PM 

This press release is more interesting for what ROG did NOT write than what it did. Specifically, and explicitly whether or not ROG kits will be be available in North America for wholesale purchase and through whom and what are the "future implications" that the Hobbico bankruptcy may have "for Revell-Germany"...





    
This message has been edited by ga1424 from IP address 65.130.48.95 on Jan 13, 2018 10:06 PM


 
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Steven "Modeldad" Eisenman
(Login samodeldad)
HyperScale Forums
108.20.209.251

Quite simply, it is unable to provide such information.

January 14 2018, 9:12 AM 

First, the most basic issue is that it cannot give more information than the parent company will or can. Even as a German company, it is still a subsidiary of Hobbico.

Second is the big issue of the bankruptcy of the parent, Hobbico. They have filled for Chapter 11, therefore they are making an effort to reorganize, gain additional capital and keep the business going until a buyer is found. The objective is to get rid of a certain amount of debt and keep on doing what it has been doing, with regard to the US and its German subsidiary.

The unknown is whether the creditors find Hobbico's current and future operations untenable and force it into Chapter 7 Liquidation. If they do, the assets of Hobbico are sold off, including its ownership interest in Revell of Germany. That assumes someone out there wants to buy them. Private investor? Considering Honrby's financial predicament at the moment, doubt they have the capital, although a wealthy outside white knight could show up. Peter Jackson? (ha ha).

The bottom line is that they really don't know what will happen, other then muddle through at the moment. Considering Hobbico's liabilities are 10 times its assets, and management has a bad reputation, you make the call. Good money after bad? Or, take our 10 cents on the dollar and be glad.

BTW, given the extensive ESOP, the employees are screwed. If Ch. 11, low value for the foreseeable future, if Ch. 7, they get nothing for all their years of service. Shareholders have bottom level priority.

"Another day older and deeper in debt"
Merle Travis.


    
This message has been edited by samodeldad from IP address 108.20.209.251 on Jan 14, 2018 11:23 AM


 
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Paul Budzik
(Login P_Budzik)
HyperScale Forums
107.77.75.53

Thank you for that explanation... very understandable

January 14 2018, 11:08 AM 

Paul

 
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