Lionel files for bankruptcy

[AlanRail]

Tony

Look Lionel is not dead yet. Far from it; Think United Airlines.

2) As consumers there is an expectation of quality as the bar has risen, due to Wolf, Atlas, Weaver , Sunset, whatever. The result is that Wolf CAN'T go back in time when it comes to details and quality, that is if he wants to stay in business.

3) We are a market driven society, so if prices rise unexpectedly sales will drop off; so I don’t expect a rise in prices anytime soon

But really, it is way too soon to make accurate market predictions.

Alan

[Anonymous]

I don't know if Lionel would be better off if MTH owned it. But I do know that the hobby & those who enjoy it would be worse off in that case.

Competition keeps prices down & innovation up. Lack of competition leads to complacency & shoddy quality. Don't think that just because Mike Wolf is a "train guy" that the quality won't go down & the prices won't go up if Lionel LLC were to desolve.

I really think that people should stop idolizing & thinking emoitionally & start using their heads.

Tony

[railfanespee4449]

a family friend gave me a 1666 prairie, a 2466wx tender that didn't work, a merchandice car, a Bucyrus Erie crane, a coal dump car, a 1041 transformer, and about 3 mi. of 0-27 track. I plan to buy lionel products in the future. Come on ,Lionel LLC

[Anonymous]

Hey Ya'll

This is a sad day fopr us all.
Lionel has been a household name in my fam,ily since my grandfather was born (he died before I was born).

He recived a clock work Hafner train with a Blue ands Silver locomotive and blue and silver passenger cars, a year later, he was upgraded to a Lionel Freight set (My grandmother sold the trains before I was born, or she wopuld have given them to me.

Then my father recieved a Lionel Texas Special Passebger Set aas well as a Berkshire freight set. These were also sold, but my grandmother has pictures of my father playing with his new trains and my grandfathers.

Around the same time, my aunt (Before she married my uncle, she was not related) recieved a Lioenl Scout which she still has and she promised to give me when I graduated 8th grade (I will at the end of this year)

I wanted a Lionel ever since I first played with my Auints, so when I graduated Middle school, she bought me a Lionel off E-bay which was made in the 1970s.

Nick

[kehoesj]

I am saddened to hear this news, but fully realize it's need based upon the judgement against Lionel. As a former Lionel Ambassador, I had and still do promote the Lionel product line, although I must admit, the passion has diminished since American workers no longer create the magic. Being a Michigander, the factory and workforce located there was another reason for my desire to promote the fun Lionel had to offer. I have no doubt that Mike W. has a great passion for trains, and I view him as a modern day Joshua Lionel Cowen. Competitive business is unfortunately tough love. Working in the automotive trade, I see this everyday. Survival often takes on ruthless methods. Lionel is taking it's only way for some opportunity for continuity. I certainly feel Lionel's long tradition will last far beyond current management - or - future management. We all value the magic. MTH can never replace the name - or erase the history, but it will be a participant only.

[Buckeye Riveter]

Alan, again your words ring true based on my experiences with bankrupt companies.

One of the things you didn't mention is that if one can get access to court documents possibly through the internet, we are going to learn more about Lionel than we can imagine.

[eZAK]

There is only one thing to do........................

Buy more K-Line!

[AlanRail]

First, I am a lawyer.

Second, again, this is a reorg under chapter 11; not a liquidation under Chapter 7.

Please, Everyone take a deep breath. United Airlines has been in reorg for a more than a year now. They are still planning on cutting pensions to recover.

So this will all take some time and give Lionel a lot of breathing room. The Bankruptcy judge will very likely permit them to proceed with the appeal because it is in the best interest of the creditors, even MTH.

HOWEVER, All litigation is immediately and automatically stayed. This means that unless the stay is lifted; MTH is stopped dead in their tracks as far as collection on the judgment. There will be a plan to pay money to the secureds and unsecureds developed down the road that MTH will try to object to but that will be overruled by the Bankruptcy judge.

Alan

[Anonymous]

As far as I'm concerned, MTH makes the best trains on the market today. And DCS is tops! If Mike Wolf gains ownership of Lionel, it will be the best thing that happened to the hobby.

[okiechoochoo]

I don't have to worry about who I support. I buy mostly postwar. I did, several years ago, buy three locos from MTH. All three had sound and operational problems and were eventually sold. I returned to postwar only. However this turns out will not bother me at all but I hope the Lionel name stays out of the hand of the person who destroyed it, if it comes to that.

[Buckeye Riveter]

Attorney Ken McCartney's book PLAIN TALK ABOUT BANKRUPTCY may be accessed using the url below.

From his web page: This popular client aid addresses frequently asked questions with frank honest answers, and is designed to enhance our clients' understanding of the intricacies of federal bankruptcy.
http://www.bankruptcyrep.com/plain_talk.htm

[3railguy]

QUOTE: This means that it may be possible that MTH's imitations of Lionel were 'legal' then, but would be deemed 'illegal' now; likewise, it may be possible that under previous standards MTH might not have a viable case against Lionel. I guess the whole thing will clog up the Courts until sanity prevails (if only!)

Yes, yes, yes! This is the reason I side with Lionel. A thief (MTH) has been robbed in an unfair legal system. Kughn, Wellspring, Young, etc. spent big bucks for the Lionel name and product line only to have it exploited by this copycat monster. Reverse engineering involves very little effort. That is why MTH cranks out so many reproductions so fast. The same speed Lionel cranked out MTH copies.

MTH has made up a number of lame excuses for reproducing Lionel.

1) "We improved the quality" This may be partly true but it is not an excuse. Lionel improved the MTH engines in the suit by adding command control where the MTH versions had PS-1 boards. Personally, I do not call replacing reliable field wound spur gear motors and mechanical reverse with can motors and toasty coelectronics.

2) "We offer hobbyists products Lionel discontinued" Another crock. This may of been true during the 70's and early 80's but Kughn and Wellspring both sought out subcontractors to continue the old favorites. Additionally, MTH has flooded the market with reproductions.

[Anonymous]

QUOTE: Originally posted by Bill Conner

Lionel would be a lot better off if Mike Wolf owned it. He's the only one I know of that has the passion and knowledge of O gauge trains. Wellspring is only in it for the money. They hired Calabrese to license the Lionel name on everything he can find.

A very accurate statement!

[nblum]

"Would it not make sense for MTH to run the bid for the Lionel name up to $40 million? Wouldn't MTH essentially be paying the $40 million to themselves? If Kuhn or others were to bid, wouldn't they be paying the $40 million to MTH?"

Usually in bankruptcy proceedings the judge makes decisions about who gets paid what out of the proceeds of the sale of company assets. Since there are modest assets aside from the Lionel name, MTH might well be paying Lionel's secured creditors and receive little or no money back from their purchase of the tradename. If it were that simple, they'd be delighted Lionel's filed for bankruptcy. They're probably exceedingly annoyed and will likely do their best to challenge the filing and find a way onto the creditor's committee so they can try to influence decisions. Needless to say, a bankruptcy judge is unlikely to view favorably a position on the creditor's committee if the seat goes to someone who wants to see the bankruptcy become a chapter 7 (dissolution), from what I've heard about such proceedings.

[Anonymous]

crossracer1001, it's been my experance through ch 11 cases that it can drag and drag and drag and drag and drag,,,,,,,,,,Get the picture?

[Anonymous]

SO will those who KNOW, please answer some simple questions?

1. How long can a company use chapter 11 to reorganize?
2. If, for example, Lionel could be in chaper 11 for 2 years, would they have to make any kinds of payments to MTH, or would they be able to keep the money in a bank and earn interest off of it? Or use it to invest in a new line of trains or something similar to that?
3. If they appealed under chapter 11, would they still have to post a bond? Since the majoriety of the reason for chapter 11 seems to be the verdict, it seems to me to be able to post a bond of 40 million would be silly under chapter 11.

4. Everyone, this is very sad, for ALL concerned. Mth is nothing without Lionel, and we are all HURT when there is a lack of compitition in the market place. So lets play nice, think about what you have to say, and if it seems hurtfull, skip it. THis is a great place to be, and in the end, its all about the trains.

Bill

[Bob Keller]

I suggest that we all be responsible in our posts. If we can't have a discussion about this without name calling or sarcasm, we'll wrap the thread up.

[Anonymous]

Obviously Bill Connor must work for MTH. He is brainwashed to think that Mike Wolf is ethical. PLEASE EVERYONE BOYCOTT MTH.

[Anonymous]

I see that the flame wars are beginning. What fun (What's the smiley for "sarcasm" look like?)

The fat lady's limbering up, boys. But she's not ready to take the stage yet. It will be a long time till she does.

Until then, can we all just be civil to one another? Contrary to what you guys think, this isn't a religious war here. It's just business. And believe me, no one is in this business just for the love of toy trains. They're all trying to make a profit.

Sorry to rain on anyon'e parade.

Tony

[highrailjon]

I'm with you jjj[:D]. The only thing successful about MTH may be thier attorneys for now ,cause it sure ain't thier products!![;)][:D][:D]

[Anonymous]

Mike Wolf is an outstanding businessman with high ethical standards. He also knows more about toy trains than anyone in the business. How do you think MTH became so successful? [C):-)]

[Anonymous]

What makes Mike Wolf so special. Like I said, from the day he opened the doors of his company all he did was copy everything Lionel made. Wow, what an entrepeneur. What a genius. That man is as low as you can go on the ethics scoreboard. He's pure pond scum and I hope everyone boycotts MTH products.

[Anonymous]

QUOTE: Originally posted by Bill Conner

Lionel would be a lot better off if Mike Wolf owned it. He's the only one I know of that has the passion and knowledge of O gauge trains. Wellspring is only in it for the money. They hired Calabrese to license the Lionel name on everything he can find.

[Anonymous]

Lionel would be a lot better off if Mike Wolf owned it. He's the only one I know of that has the passion and knowledge of O gauge trains. Wellspring is only in it for the money. They hired Calabrese to license the Lionel name on everything he can find.

[Anonymous]

MTH has made their living on copying EVERYTHING that Lionel has ever made. I have never bought a MTH item because of this and I urge EVERYONE to boycott MTH and their ruthless owner.[[/b][/size=6]

[Anonymous]

Neil,

Would it not make sense for MTH to run the bid for the Lionel name up to $40 million? Wouldn't MTH essentially be paying the $40 million to themselves? If Kuhn or others were to bid, wouldn't they be paying the $40 million to MTH?

Bill Sherwood

[nblum]

If MTH owns Lionel's name, business at Sanda Kan drops by tens of millions per year, something that JP Morgan Chase would not like to see. Likewise, Lionel's secured bank loans at other banks would be put in jeopardy by a Chapter 7 filing. Typically, creditors get pennies on the dollar. MTH probably doesn't have the cash or credit lines to pay big bucks for the Lionel name at auction, and none of the other creditors are on the hook for Lionel's 40 million dollar verdict setback. So the likelihood of MTH winding up with the Lionel name is quite small. I would expect JP Morgan Chase, Neil Young, and/or perhaps even Richard Kughn to outbid MTH for the Lionel name at any auction, in any case.

The fact is that the only petitioner likely to fight the Chapter 11 filing is MTH, because they stand to lose everything they've won in court if Lionel can appeal and simultaneously be protected from their other creditors for the short run.

[herbw2]

Lionel has been pretty preditory in the past. I can understand MTH's hard feelings. Don't get mad , get even. Do any of you remember what Lionel did to Nolrman Thomaqs years ago?
Additionally, it's fun reading learned legal opinions from non-lawyers.

[daan]

exactly as predicted in one of the former posts by someone.. Lionel gets into bankrupcy securement to reorganize..

Let's hope Lionel keeps afloat somehow..