Could Mike Wolf end up owning Lionel?

[MartyE]

OK That was 1997 and this is 2004. Circumstances have definitely change.

[Anonymous]

The following interview with Mike Wolf was conducted on September 6, 1997 at America's Best Train & Hobby Shoppe in Glendale Heights, Illinois:On the occasional rumor that Mike is purchasing Lionel:

"I can tell you 100% there's no truth from my end. I have no contact with Lionel. Nothing. I hear rumors too. There's a lot of rumors in this business. I've never spoke to Lionel's president [Gary Moreau, at the time of this interview]. I don't know him. We're competitors."

[Anonymous]

I not only think that Mike Wolf will end up owning the Lionel name, but I will be amazed if anything else happens.

Lionel owns nothing as a company. They don't own TMCC, Neil Young and his group control that. They don't own any of their tooling as far as I can tell, all that was subcontracted and that is what got them in this mess in the first place. If my information is correct, they don't own their home offices any longer.
They do own QSI, Fast Track and some tooling for their general product line, though I feel they might have them on a lease purchase agreement to their asian manufactuers.

I would be hard pressed to bring the above value in at more then ten to fifteen million.
But, the Lionel name could go for probably twenty-five to forty million.

Now we must consider Lionel present, secured debt of thirty million. That was made last year I think. From what I read and have been told MTH gets first crack at the assets because they where wornged by the debtor in a criminal action.

Remember that people in Korea went to jail because of this crime and the officers at Lionel where named as co-defendants, or at lest co-conspirators in that case.
South Korea is a `member of the international trade agreement thus provideing MTH first bids on the net worth of Lionel.
Of course the banks will get something I'm sure and the Lawyers will get paid. But, even after a possible settlement reduction of five to fifteen million bucks the only smart thing for MTH to do will be to ask for the name after all their bills are paid.

The only thing that can stop this prosess is a reversal of the reward and don't hold your breath, or Well Spring can unloade Lionel for about fifty to sixty million, then file chapter 11, on Lionel LLC.
The latter solution is doable if they can find a company with deep enough pockets that wi***o get into the over crowded toy train market.
If you had that kind of money to invest would you wont to go up aganst MTH, K-Line, Atlas, Weaver, Williams, 3rd Rail, not to mention the growing s-gauge line? I don't think so.
Other then Marklin or LGB there are not alot of people out there who can aford it and have the know how to compete with MTH and K-Line head to head let alone all the other niche market specialist we have vying for our dollars.

I think the banks will insist in the bankruptcy court, that MTH get control of the name and it's intelolectual rights if MTH agrees to return them their monies as contracted by Lionel because Mike Wolf is the only act in town that can get the job done and has the market position ti come out on top. In this way the banks will recoup more then the ten cent on the dollar the court will grant them on an total liquidation.
Of course, as stated above the final numbers will be hammered out by the lawyers, but in my very humble opinion, that is where this will go.

Keep on Tracken,
Mario E.

[Anonymous]

[:D] Mikes Lionel Train House [:D] coming soon[^]

...keep the rails polished...

[MartyE]

Also if he does end up owning Lionel, would it be Lionel by MTH or MTH by Lionel? Or any other manufacturer that might end up with the Lionel name? Oh well just speculation after all we are a long ways from any of this I'm pretty sure.

[Anonymous]

Frankie CSX:

Good choice but I think Jerry Williams is busing doing his own thing.

Thank God for Jerry Williams. If it weren't for Jerry Williams we would not have Mike Wolf.

BillFromWayne
www.modeltrainjournal.com

[MartyE]

If Mike ended up Lionel, she would be in good hands. Let me preface by saying that it is not what I want as competion is good for the hobby. But lets face the facts...

Mike has been doing this longer than I would say 95% of the people at Lionel now.

Mike loves this hobby and is personally involved. I can't say the same with current Lionel management. I get the impression with a lot of them it's just a job.

I've never seen Mike not enthusiastic about his product and the hobby and knows his product. Lionel reps have been stumped at the easiest questions with few exceptions of Todd Wagner and a few others.

That being said I do hope Lionel remains it's own enity but if Mike were to get it, it could be a lot worse hands and quite possibly better than what it is today.

My 2 cents.

[Anonymous]

Anyone think Jerry Williams might buy the Lionel name?

[Anonymous]

Okiechoochoo:

Listen, I agree about the Lionel name. I can’t imagine a father walking into a train shop and
asking the counter person to show him a Lionel Train Set at Christmas and the counter person
does the old bait and switch and shows him a K-Line or MTH set. “What’s K-Line? What’s
MTH? I want Lionel Trains.” That’s where Lionel has the edge. Its name recognition.

My reasoning is that Mike is enthusiastic about the train business and has a savvy about the
business that none other have.

Kughn and Wolf were the best things that ever happened to Lionel and it showed in the increased quality and quantity of trains and accessories from Lionel. But management changed hands and Lionel was seen as a trophy because of the perceived income from the recognition of the Lionel name and a host of silly non O-gauge train products licensed by Lionel.

So, if Lionel gets sold again, and MTH isn’t the successful suitor then look for a repeat of the
MPC crap.

As I stated in many previous posts with this theme, I could care less if Lionel were to shutter their
doors today. Of course I would be sad, however, I have so much O-gauge train stuff that I have
enough trains to keep me busy until the Grime Reaper comes a knocking.

That’s my opinion.

BillFromWayne
www.modeltrainjournal.com

[okiechoochoo]

Bill
What makes you think Mike's possible takeover of Lionel would be good for the hobby. Bet he would use the Lionel name to sell trains instead of MTH which shows who the real number one is

[garyseven]

Who is the judge in the case?
Is there anything pertinent we can learn from previous rulings?
Does it go next to a Court of Appeals with multiple judges?
Is there anything pertinent we can learn from their previous rulings?
Can someone give us a layman's (or in my case, a big dumb guy's) timeline and primer of what to expect next?

[nblum]

I agree that Lionel nameplates would be infinitely better and more appropriate than those goofy MTH nameplates on these reproductions of icons of the prewar period. I might even consider buying one or two. Just not with the MTH nameplate :).

Perhaps Mike could run Lionel better than the current guys. He hasn't done all that well with MTH in the last few years for some reason. Maybe we'll see just how well he does when he's the only game in town. Be prepared for there to be only one company making three rail trains within the next few years if that happens. I don't think Mike much likes to have competition.

[Anonymous]

If Mike ever winds-up owning Lionel at least he'll run it better than Lionel. Besides, I'd love to see the 'Lionel' nameplates appear on the "Tinplate Traditions'" line.

BillFromWayne
www.modeltrainjournal.com

[nblum]

Now, Bill, we don't make fun of your hobbies, leave us legal hot stove league folks to do our thing. Drivel is like beauty, in the eye (or ear) of the beholder.

[Anonymous]

Billfrom Wayne

No


Alan

[Anonymous]

What a bunch of nonsense. Don't you ninnies have anything better to do with your time than to post this drivel?
If MTH winds up owning Lionel it will be the best thing that happend to the hobby. And if it indeed happens, you can blame Lionel's incompetent management for diging Lionel's grave. All MTH has done is supply the shovels.
BillFromWayne
www.modeltrainjournal.com

[Anonymous]

Neil

No; that kind sale would look like a preference and would be disgorged or reversed. And that may be the only asset left to Lionel as I understand they have been selling off all other assets during the last few years.


Alan

[nblum]

Alan, thanks for that information. What I was curious about was not payments by Lionel, but sales of their good will and property. Could they, prior to filing for bankruptcy, sell their trademark and/or tooling to, let us say, Atlas or Sanda Kan to raise as much cash as possible prior to filing? In other words, are there restrictions on what they could sell, at fair market value, prior to filing for bankruptcy?

[Anonymous]

IF LIONEL WENT INTO CHAPTER 7 BANKRUPTCY; big on the IF:

A bankruptcy "SALE" or auction is held to obtain the highest value of the assets.

There are no preferences, in fact all of Lionel's activities over the last year are reviewed by the Bankruptcy Court; Any preferences (payments made to others that look fishy) are disgorged (reversed by the court as if they never occurred).

At that point Wolfe doesn't have any of his $24 mil, So You could buy the trademarks of Lionel if you outbid all bidders.


Alan

[okiechoochoo]

Neil,
I hope Lionel can keep their name out of Mikes hands. I would rather have no Lionel than Mikes stuff with Lionel's name on it

[3railguy]

If MTH were to take over Lionel.....................................
My favorite brand is Atlas followed by Lionel. More and more Lionel is built like Atlas these days anyway. Plus they both have TMCC. I prefer TMCC over DCS due to it's simplicity. TAS I'm sure would keep up the TMCC components. So if MTH takes over Lionel, I will only buy Atlas. I'm not going to worry about it too much. There are plenty of options out there.

[nblum]

Alan, in the worst case scenario, could the owners of Lionel sell the Lionel trademark and rights to the use of the name to another company to raise cash prior to declaring bankruptcy, thus keeping the right to use the name out of the hands of the individual who successfully destroyed the company?

[Anonymous]

WORST CASE

Let's say (since we have assumed everything except the Sun going Supernova) THAT
Lionel is over-leveraged and can't get a loan and cant raise the $41 mil req's to be held with the court ( In Fed Court, I think that this can be a Surety Bond) within the next six weeks in order to appeal........

LIONEL is then forced into an involuntary Bankruptcy by Wolfe and two other creditors (usually banks)(Chapter 7 no reorg like United); the the company will be disolved ; the assets sold off to pay the secured creditors, Wolfe is now a secured creditor. Wolfe gets in line with all the other secureds and his claim is last in priority of the other secureds usually Lionel's prior bank loans are senior claims.

Wolfe could get NOTHING! of Course Lionel is gone!!

Alan

[Anonymous]

Anyway you look at it, I agree with Elliot. Lionel will continue and Mike will not own it.

[Anonymous]

Here's is how it is done

take the award subtract the costs then Wolfe gets 60% of the remander;
the 1/3 for legal fees is not typical these days in large IP cases and even PI cases the contingent fee amout is 40% after costs;

However, Wolfe could have worked out any sort of deal with his atty; do you know that for a fact that it is 1/3????


Alan

[ChiefEagles]

Alan, not 40%. My leagal person says 1/3. 33.3% of 40 M is not as much as 40%.

[nblum]

The events in question occurred in the 1997-2000 time framework. *** Maddox didn't arrive on the Lionel scene until mid to late 1999. He wouldn't have been directly involved in these events except in the aftermath. I may be mistaken, but I don't think so. Gary Moreau was the CEO when the alleged improprieties occurred.

[eZAK]

Probaly never!
I think the name Lionel is worth more than $40Mil.
They would probaly file chapt 13(or 11) before they sell.

QUOTE: My understanding is that people in Lionel are following Maddox's lead and are polishing up their resumes. Every man for himself!

Isn't Maddox the guy who got Lionel into this mess in the first place!
Move everything to China and stealing trade secrets.....!.What A Guy!

[Anonymous]

Well first he has to pay the lawyers and court costs; likely 40% plus 2 million in costs as he did this on contingency fee;

So Wolfe only has $23,220,000. to play with.

I wish he'd invite me over to play!

Alan

[Anonymous]

QUOTE: Originally posted by dougdagrump

Both of their products are already overpriced in my opinion.

Of course they are Doug.