Last updated on August 9th, 2019 at 11:36 am
The owners of Iron Town Harley-Davidson in New Berlin are negotiating with two potential ownership groups interested in buying the currently closed dealership, an attorney for the owners told a judge Wednesday.
There is also an ownership group negotiating to buy the Broadtracker dealership in Janesville and another potential buyer is interested in buying both dealerships.
Attorney Robert Rattet, who represents the business entities behind the two dealerships in their bankruptcy filing, said he did not want to disclose the potential buyers but indicated the interested parties already owned Harley dealerships.
Any buyer would need the approval of Harley-Davidson.
H2D Motorcycle and JHD Holdings filed for bankruptcy last month after facing a lawsuit from Harley-Davidson Credit Corp. over $6.3 million allegedly owed by the dealerships. Harley accused the dealerships of failing to pay the company for motorcycles they sold. The parties agreed to dismiss the lawsuit on Wednesday.
The Janesville dealership closed this spring while Iron Town Harley-Davidson closed suddenly in July. Court filings showed the dealerships had generated more than $34 million in combined revenue in 2018 but they brought in $6.8 million so far this year.
“The value of the franchises has been diminished but we think there’s still real value,” Rattet said.
He said the plan is to select an initial stalking horse bid for the dealerships by Sept. 15 and to hold an auction for the assets by Oct. 15. Ideally, the transactions would close by Nov. 15.
“We’re on a fast track to make sure this is done expeditiously,” Rattet said.
As of the bankruptcy filing, the dealerships had combined assets of $10.1 million and around $13.1 million in total claims against them.
There was a buyer for the Iron Town Harley-Davidson dealership earlier this year. When the Harley-Davidson lawsuit was first filed, the owners of Wisconsin Harley-Davidson in Oconomowoc agreed to take over management with an eye towards completing a purchase agreement.
But Wisconsin Harley-Davidson owner Robert Moakley said the dealership was too far gone financially and needed a larger capital injection than he anticipated. Moakley was unable to secure financing for the deal and withdrew from the management agreement at the end of May.
The bankruptcy filings for both dealerships indicated they had management agreements in place with Windy City Harley-Davidson, a large ownership group based in Chicago that includes Milwaukee Harley-Davidson, West Bend Harley-Davidson and a planned Harley dealership in downtown Milwaukee.