Wellspring Capital Management Divestiture of Lionel LLC

[ADCX Rob]

wallyworld

Is MTH a privately held company?

Yes.

[wallyworld]

Bill,

Coming from a simpler era of private ownership, or maybe I am just naive when it comes to the finances of manufacturing, my head was spinning from what I thought was a simple proposition. One of the quotes I found in my browsing around was from the President of the Lionel V. 5 saying in response to a reporters question, that they would primarily focus on a "collectors market." including postwar remakes and pricey editions..I cant help but wonder where all this is going..

Is MTH a privately held company? I was pretty surprised when LGB bit the dust...

Bruce

[Seayakbill]

Yep, Lionel has seen many owners over its 100 years. I am guessing there will be another one in the future. Typically capitol management firms turn their holdings about every 7 years or so. Unless Lionel is bringing in the super big bucks to Guggenheim Capitol Management I would guess they will be shopping the company someday.

[wallyworld]

Thanks Rob..It's amazing how the remains of Lionel were parsed, and that Lionel is simply now , I suppose, just a name in relation to what Cowen initiated and owned.

A much more complicated history than I had imagined.

[ADCX Rob]

wallyworld

It went from Cowen to Cohn to General Mills to Kughn to Wellspring to Guggenheim

It's not really that simple.  You are co-mingling public corporations & owners with licensees, manufacturers, & importers/marketers.

Lionel and it's trademarks were not owned by the folks who were making the trains from 1969 to ~1994.  The Lionel Corporation was a publicly held company from 1937 until the corporation went bankrupt in June of 1993. It was a closely held corporation from 1909 to 1937.

It does not exist anymore.

Kughn acquired the train & toy line intellectuals finally when Lionel folded, and was able to sell the whole package to Wellspring shortly thereafter.

[wallyworld]

Thanks Bill for clarifying this..

It went from Cowen to Cohn to General Mills to Kughn to Wellspring to Guggenheim.

Got it.

I had it in my head that Wellspring was still in and then a friend said they were not, but did know know who was.

[Seayakbill]

Guggenheim Capitol Management purchased Lionel during the bankruptcy process. If you read the bankruptcy papers you will see that Guggenheim Capitol Management had 10 million in secured loans LLC.

[wallyworld]

I know they came out of bankruptcy in 2008 after the lawsuit with MTH in 2004. Its interesting that Lionel itself made zilch in profit in 2004 ( for two fiscal years in total, according to court documents) and the Dale Electronics ( a subsidiary) had to be sold to liquidate the unpaid debts.

http://business-finance-restructuring.weil.com/asset-sales/a-lionel-of-bankruptcy-jurisprudence/

So.....If I understand this correctly, Neil Young bailed out as a stake holder, according to Forbes, and that the selling of Dale Electronics allowed new loans ( Guggenheim, etc)  to be secured to capitalize the reorganized company. It's funny....while it identifies itself as Lionel, LLC, its press releases refer to it as Lionel Electric Trains, headquartered in New York, NY.. What a complicated mess..In the court papers Lionel stated that the toy train industry it holds a majority stake ( 60%) in sales, that is worth between 55 and 60 million dollars. Wow.

[Bob Keller]

I believe that this change happened when they came out of bankruptcy a few years ago. Post bankruptcy funding was provided by Guggenheim Corporate Funding and the estate of Martin Davis (a former partner of Wellspring). We had a brief item in the July 08 CTT.

I believe there were some minority interests for a few other parties, too.

[wallyworld]

..I thought Wellspring LLC owned Lionel and that through Wellspring, Neil Young had a 20% stake...Am I misreading this situation?  Just out of idle curiosity..If so, who owns Lionel? Scroll down on the list to the bottom to find Lionel listed as divested by Wellspring..

 

http://www.wellspringcapital.com/divestitures.html