Rocky Mountain declares bankrupcy

[mikimono]

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.

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

 

[mikimono]

Rocky Mountain announces its intention to restructure its operations under the Companies' Creditors Arrangement Act Français​

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NEWS PROVIDED BY​

Rocky Mountain
Dec 19, 2024, 16:09 ET

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SAINT-GEORGES, QC, Dec. 19, 2024 /CNW/ - RAD Industries Inc. (the "Company" or "Rocky Mountain") announced today that it has filed an application with the Superior Court of Québec (Commercial Division) (the "Court") for Court protection under the Companies' Creditors Arrangement Act ('CCAA').
Despite strong demand for its bikes during the pandemic, the Company struggled to secure supplies due to shortages and rising costs. Once the pandemic was over, the Company had to contend with a sharp drop in selling prices.
As a result, margins have tightened, putting unprecedented financial pressure on the Company. Rocky Mountain has no choice but to initiate restructuring procedures to launch the Sales and Investment Solicitation Process (SISP) to become a resilient and successful long-term business.
By undertaking a restructuring process under the CCAA, the Company will be able to avoid business interruption as much as possible and reduce the resulting impacts of the current situation. The Company will ask the Court to appoint Ernst & Young to act as Monitor under the CCAA. Lavery de Billy is acting as Legal Counsel to the Company.
About Rocky Mountain
Rocky Mountain Bicycles has been designing, developing, and perfecting mountain bikes in and around North Vancouver, BC, since 1981. The diverse playground of the North Shore has offered us the ideal proving grounds for all kinds of riding. Split between our R&D centre in North Vancouver (British Columbia) and our head office in Saint-Georges (Québec), our team has an impressive heritage. We are a Canadian company with a global reach, and our goal is to deliver an exceptional experience. From the moment you throw a leg over one of our bikes, it's clear that they're made for people who Love the Ride.
SOURCE Rocky Mountain

Rocky Mountain announces its intention to restructure its operations under the Companies' Creditors Arrangement Act

/CNW/ - RAD Industries Inc. (the "Company" or "Rocky Mountain") announced today that it has filed an application with the Superior Court of Québec (Commercial...

www.newswire.ca

 

[Guyt]

Trump wants to impose 25% tariffs on Canadian goods in January. If that happens, a lot of small Canadian companies won't survive. Not reassuring for companies like Rocky Mountain that are already struggling.

 

[e-rico]

Trump wants to impose 25% tariffs on Canadian goods in January. If that happens, a lot of small Canadian companies won't survive. Not reassuring for companies like Rocky Mountain that are already struggling.

Yes allot of Canadian companies will suffer.

Most Canadian bike companies manufacture in Taiwan and ship directly into the US so it will depend on if the next admin imposes tariffs on bikes and bike parts from Taiwan (I expect they will). Expect to pay more for all bikes in the US since most are made there.

The only Canadian brand that will get hit directly by the tariffs you speak of is Devinci who make some of their frames in Quebec.

 

[Stihldog]

Well I guess we can start supporting home-grown products or products from friendly nations. Either way it’s gonna hurt.

And I don’t think we should use the word “Moron” to describe the “Moron” who behaves like a “Moron”.
I hope this is a safe place. 🫢

 

[Tooks]

I’ve had a few Rocky Mountain bikes over the last couple of decades, it would be sad to see them go under.

I’ve still got a RM Switch SL, can’t bear to part with it, had so many great rides on it! Yes, the head angle is comically steep by todays standards, but it’s still a great ride even with its Tongsheng TSDZ2 conversion. It lives up in the Pennine’s now, on long term loan to a mate.

Fingers crossed they sort something out and continue.