Bad news for Rocky Mountain.
I hope I'm wrong but something tells me it won't be the only one.
The Canadian company Rocky Mountain Bicycles has filed for bankruptcy protection under the Canadian Companies' Creditors Arrangement Act (CCAA). This news has shocked not only the bicycle industry, but also fans of the traditional brand, which has been active in the mountain bike segment since 1981 (!).
Why is Rocky Mountain Bicycles filing for bankruptc
During the pandemic, Rocky Mountain was able to grow strongly due to the high demand for bicycles. However, supply bottlenecks and rising costs put a strain on production. After the pandemic, demand collapsed and falling sales prices drastically reduced margins. As a result, the company was forced to initiate a restructuring process in order to be able to operate economically again in the long term.The process is made possible by Canada's insolvency law CCAA, which allows companies in financial distress to maintain their business operations during a restructuring.
Classification of the legal situation: Canada vs. Germany
In Canada, the CCAA offers struggling companies the opportunity to enjoy protection from creditors during a restructuring, similar to the German protective shield procedure under the Insolvency Code. A key difference, however, is the flexibility of the CCAA, which gives companies extensive negotiating options with creditors. In Germany, the process is often more heavily regulated, particularly with regard to the requirements for initiating and conducting insolvency proceedings.
Impact on staff and sponsors
According to reports, numerous employees in the North Vancouver and European offices have already been laid off, including almost the entire workforce at the North Vancouver headquarters.This could also mean the end of the partnership for Rocky Mountain sponsored athletes. We do not yet have any information on the situation at BikeAction, the EU distributor that Rocky Mountain only took over in 2023.
www.mtb-news.de
I hope I'm wrong but something tells me it won't be the only one.
The Canadian company Rocky Mountain Bicycles has filed for bankruptcy protection under the Canadian Companies' Creditors Arrangement Act (CCAA). This news has shocked not only the bicycle industry, but also fans of the traditional brand, which has been active in the mountain bike segment since 1981 (!).
Why is Rocky Mountain Bicycles filing for bankruptc
During the pandemic, Rocky Mountain was able to grow strongly due to the high demand for bicycles. However, supply bottlenecks and rising costs put a strain on production. After the pandemic, demand collapsed and falling sales prices drastically reduced margins. As a result, the company was forced to initiate a restructuring process in order to be able to operate economically again in the long term.The process is made possible by Canada's insolvency law CCAA, which allows companies in financial distress to maintain their business operations during a restructuring.
Classification of the legal situation: Canada vs. Germany
In Canada, the CCAA offers struggling companies the opportunity to enjoy protection from creditors during a restructuring, similar to the German protective shield procedure under the Insolvency Code. A key difference, however, is the flexibility of the CCAA, which gives companies extensive negotiating options with creditors. In Germany, the process is often more heavily regulated, particularly with regard to the requirements for initiating and conducting insolvency proceedings.
Impact on staff and sponsors
According to reports, numerous employees in the North Vancouver and European offices have already been laid off, including almost the entire workforce at the North Vancouver headquarters.This could also mean the end of the partnership for Rocky Mountain sponsored athletes. We do not yet have any information on the situation at BikeAction, the EU distributor that Rocky Mountain only took over in 2023.
Rocky Mountain Bicycles meldet Insolvenzschutz an - MTB-News.de
Rocky Mountain Bicycles aus Kanada hat Insolvenzschutz nach dem Companies' Creditors Arrangement Act (CCAA) beantragt.
www.mtb-news.de
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