Holy Moly, LGB files for German Bankruptcy, Update: Factory closed.

[vsmith]

Why did I have to read this on the MR forum?

http://www.trains.com/trccs/forums/907400/ShowPost.aspx#907400

text reprinted;

_____________________________________________________________

"It looks like E. P. Lehmann may be in for a bit of a rough ride over the next few months, but the good news is that the difficulties shouldn't affect product availability. Here's the story we're about to post:

 

E. P. Lehmann Patentwerk, manufacturer of LGB trains, today filed for financial protection in a German court. The protection was sought because their bankers had called Lehmann’s loans due in an effort to force a sale of the firm to an investor favored by the bank. As part of the same effort, the banks had prevented Lehmann from shipping finished goods to its customers, including now-independent LGB of America. (Shipments of LGB trains to LGB of America from other suppliers had not been affected.)

“We’re happy they (Lehmann management) have taken aggressive action to protect the company from a hostile takeover. We believe they will begin shipping from Germany again this week. We have plenty of product in our U.S. warehouse and are shipping as normal,” according to LGB of America’s David Buffington.

Buffington added, “The LGB brand has tremendous value around the world, and no one is going to let that get away.” – Terry Thompson

 

Thanks for reading MR, Terry..."

_______________________________________________________---

This sucks, I hope it works out for the best.

[Anonymous]

How could this have happened, they seemed to me a well run if a bit arrogant mob. Is there too many people living off the company and taking too much out of it?

Or has there been some dirty work at the crossroads against LGB?

I'm worried!

Ian

 

[vsmith]

Ian

heres more discussion of it, it looks BAD...

http://mylargescale.com/forum/topic.asp?TOPIC_ID=41522&whichpage=1

http://www.largescalecentral.com/LSCForums/viewtopic.php?id=6513

 

 

[TonyWalsham]

Victor.
Do you know for a fact it is a hostile takeover.
The above is a comment from the new "head" of G45.
There is no comment anywhere in the above from EP Lehmann Patentwerk.

I would respectfully suggest you make sure you have all the facts before proposing any hypothesis.

[vsmith]

Victor. Do you know for a fact it is a hostile takeover. The above is a comment from the new "head" of G45. There is no comment anywhere in the above from EP Lehmann Patentwerk. I would respectfully suggest you make sure you have all the facts before proposing any hypothesis.

Tony I'll be sending you an e-mail on this, and I'll be carefully watching what I say from this point on...

[Michael Stephens]

There is no comment anywhere in the above from EP Lehmann Patentwerk. I would respectfully suggest you make sure you have all the facts before proposing any hypothesis.

Here's a statement from Germany posted on the LGB Club site forum:

Ernst Paul Lehmann Patentwerk today announced that it was taking strong, immediate steps to prevent a hostile takeover of the family firm. Those steps include legal moves that should enable Lehmann to continue providing its quality products and services around the world.

"We do not believe that a hostile takeover financed by international bankers is in the best interests of our employees, representatives, retailers and consumers," said Rolf Richter, Managing General Partner of Ernst Paul Lehmann Patentwerk. "Lehmann has been operating profitably, despite the severe problems in the model train industry, and we believe our family atmosphere is a very important reason for our success."

To preserve that family involvement, Lehmann has taken the legal step of asking the German courts for protection from its financing banks. "We feared that the largest of our financing banks, an international bank forced upon us after the dissolution of our local bank, sold its loans to Lehmann to a third party without our knowledge," said Richter. Richter also emphasized that these moves will enable it to ship product and provide services during the crucial holiday sales season. "We are going to ship a large volume of popular standard items, like track, and exciting new items," said Johannes Richter, Managing General Partner and production manager of Ernst Paul Lehmann Patentwerk.

[vsmith]

Theres more info bubbling to the surface...read thru all the latest in the following links:

 

http://mylargescale.com/forum/topic.asp?TOPIC_ID=41522&whichpage=3

 

http://www.largescalecentral.com/LSCForums/viewtopic.php?id=6513

every way you look at this, its bad.....

 

[vsmith]

more...

 

http://www.largescalecentral.com/LSCForums/viewtopic.php?id=6515

[vsmith]

Still no official word from Kalmbach?

 

Rene? Hello....are you here? are you still on the beach in Hawaii? or Lake Wobegon?

 

Whats the word in Wisconsin? My feet are getting sore from playing Jimmy Olsen on all this...

[Anonymous]

Interesting article.

Looks like they are doing what most Australian companies are doing - going "broke" and then popping up as the same product only made with cheap labour, poor materials, non-existant quality and higher prices ex China.

I think Quote from Buffington sums it up nicely.

And ironically, LGBs home page waffles on about the Shanghai Toy Show.

Anyways, if they move everything to China, should be able to buy pirate copies cheap!

BTW - does anyone know where in My Least Favourite Country LGB has its manufacturing done.

[Rene Schweitzer]

Vic:
Wish I had more to tell you, but I don't. We're posting the press releases here as we receive them.

[Anonymous]

Dear Rene,

The press releases from LGB are read with interest by many (all?) in the model railroad industry. Those who are fluently bilingual in German and English have also compared English text with German text and noted that the differences in content are remarkable and worthy of note.

Kind regards

ER

[vsmith]

Thanks Rene, guess we'll all just have to sweat it out, from what I can rut out, when they hold the 1st court hearings in the coming weeks will be very telling as to the future disposition of LGB.

[vsmith]

The "This Just In" thread has been:

 

 

So I guess were back to this one for any future news on the subject....

[vsmith]

bump.

Well looks that all she wrote..Nurmburg factory has apparently been officially closed.

http://www.mylargescale.com/forum/topic.asp?TOPIC_ID=46770

I haven't been updating this thread as their were so many other sources discussing it, and a lot of angry words being thrown around over this issue, so I just let this one slide, but just to cap this thread off, now that it looks like LGB will now in all likelyhood, go the way of Delton, Great Trains, and Kalamazoo before it.

I'm not going to discuss the hows and whys here as to how they likely got here, many speculated answers to those questions are out there, if you choose to read them and can keep the emotional content in check.

[Rene Schweitzer]

Vic,

You are correct. A newspaper in Nürgberg reported this [the factory closing]. Terry Thompson made a few phone calls this morning, but we have no other information. If we get anything, rest assured I will post it ASAP.

[DMUinCT]

For more information:

The "BTO" Forum (formally the LGB Club) has been translating the German Newspapers.

[bman36]

Hi guys,

     While on holidays in Vancouver I stopped in at Art Knapp trains. While talking with one of the managers he informed me that he has had supply issues with LGB for some time now. Particularily the availability of sectional track. He was already looking into stocking the new line of code 332 that AMS will be producing this fall. Funny....he already knew two weeks ago that LGB was kaput. News travels quicker in some circles. Later eh...Brian.

  

[Anonymous]

Funny....he already knew two weeks ago that LGB was kaput. News travels quicker in some circles. Later eh...Brian.

Brian.....that is about normal!

[vsmith]

Brian,

Actually some have speculated that EPL was facing kaputness when they had the blow out selling of the company archives at the annual picnic and fire-sale reduction of stock last year. A some have specualted the roots of all this go back longer to EPL not addressing the expanding competition back in the 90's.

[kstrong]

The factory doors have been shut for quite some time, and they haven't shipped products since then. The employees were still on the books until just a few days ago, when reports indicate they were "officially" let go. Up to that point, there had been hope that one of the buyout offers submitted would have been accepted. Now, it's fairly clear that that's not going to happen.

I wouldn't count the LGB products out--the tooling's just too valuable to cut up for scrap. I'd expect to see the real estate sold, and everything else auctioned off. It's going to be very interesting to see who the bidders are. End of an era? Yes. End of the product line? Not by a long shot.

Later,

K

[bman36]

The factory doors have been shut for quite some time, and they haven't shipped products since then. The employees were still on the books until just a few days ago, when reports indicate they were "officially" let go. Up to that point, there had been hope that one of the buyout offers submitted would have been accepted. Now, it's fairly clear that that's not going to happen.

I wouldn't count the LGB products out--the tooling's just too valuable to cut up for scrap. I'd expect to see the real estate sold, and everything else auctioned off. It's going to be very interesting to see who the bidders are. End of an era? Yes. End of the product line? Not by a long shot.

Later,

K

Kevin,

I hope you are right. It would not surprise me at all to see the entire line or part their of resurface as "Classic LGB" or some other catchy name. Perhaps someone will seize the opportunity to do some re-tooling and introduce more products. As you said it will be very interesting to see what sharks may be circling in the waters. Later eh...Brian.

 

[Capt Bob Johnson]

While they argueably may have been mechanically superior, I wonder how much can be attributed to  the apparent less than fervent adherance to scale when compared to the products of other manufacturers?

[bman36]

While they argueably may have been mechanically superior, I wonder how much can be attributed to  the apparent less than fervent adherance to scale when compared to the products of other manufacturers?

Bob,

I think that is only part of it. I have always found their trains to be somewhat "chubby" looking in appearance. Recently I saw a friend's new USA GP38-2....now that was nice, and very well detailed! Price wise far better than anything from LGB. Now I don't want to turn this into bashing LGB, these are only my observations. I did a repaint on LGB's big red caboose into CP livery, and now it's size gives it an ominous looking presence. A light weathering and I really like it. The interior lends itself well to being detailed. Pro's / cons. Let's see what the future holds. Later eh...Brian.

  

[stebbycentral]

Damn, if I'd only held on to my LGB for another year or so I could've gotten double the price on E-Bay.

[vsmith]

theres no way theyll cut up the tooling, this will likely go the way of Delton and Kalamazoo with all the molds and tooling getting dispersed to other mfrs.

Time will tell

[Capt Bob Johnson]

But who of any repute would want molds of what our friend here on the forum calls Gummi scale?    If Aristo or USA were to buy them it would turn me off to them!

[Curmudgeon]

I don't think that's quite right, Kevin, but close enough, I guess.

I always felt there was a difference between hanging on and hoping and the final locking of the doors.

Whether product left or not, employees were still there, right?

With the Polk and Ro adherence to 1:29 for the prime stuff, 1:22.5 may not be what they want, but then again, they might surprise us.

Bets are the ACP group is working to obtain.

Be interesting if someone gets the molds and not the trademarks.

Won't do the collector crowd any good if it doesn't have that logo.

I don't think any of the folks who ended up with Delton use the name, do they?

 

[kstrong]

I really don't see USA or Aristo going for the LGB stuff either, though the irony of Aristo buying LGB's track tooling cannot be overlooked. (Can you say "lose the battle, but win the war?") Seriously, though, neither company has shown any real interest in expanding their "legacy" product lines. While Aristo-Craft keeps reworking the C-16 mechanism, they aren't adding any new equipment to their "classics" line-up. USA has their older wood box cars, which are already virtual twins to LGB's cars. Perhaps they'd think about "expanding" the old line with some of LGB's other offerings, but I'd hardly wager the farm on it.

I'm thinking along the same lines as TOC--the players in this battle are the parties who submitted bids to buy the company outright. Time will tell. My only hope is that LGB's rubber scale rules get lost in the shuffle. It'd be nice to see a definite attention to scale and detail to match the historic quality and robustness.

Later,

K

[Anonymous]

The factory doors have been shut for quite some time, and they haven't shipped products since then. The employees were still on the books until just a few days ago, when reports indicate they were "officially" let go. Up to that point, there had been hope that one of the buyout offers submitted would have been accepted. Now, it's fairly clear that that's not going to happen.

I wouldn't count the LGB products out--the tooling's just too valuable to cut up for scrap. I'd expect to see the real estate sold, and everything else auctioned off. It's going to be very interesting to see who the bidders are. End of an era? Yes. End of the product line? Not by a long shot.

Later,

K

 

Kevin,

 

Some people have followed this "Saga" (that's what my equal half calls it) for some time. As far as "shipping" was concerned, until fairly recently one could still get spare parts from EP Lehmann GmbH & Co KG (that is Schöntag's company). The layoffs that were announced, concerned the employees of that company. That is a separate insolvency from the one of EPL Patentwerk oHG.

The haggling and the bidding concerns the insolvency mass of EPL Patentwerk oHG. It would appear that the banks hold all the cards; the insolvency trustee negotiates and then reports to the creditors (the banking pool). This could go on for any length of time since the approval of the solution has to be unanimous.

Time will tell on this one.

Best regards

ER