The Motorsports Aftermarket Group, known as MAG, a conglomerate of  multiple brands, retail and distribution channels within the motorsport  industry, has filed for Chapter 11 in the District of Delaware as it  looks to clear itself from some substantial debt.As part of process,  MAG is eliminating $300 million of debt through a  “debt-equity” swap, which basically means MAG will exchange company  equity (stock) for the debt that MAG owes its financial lenders.

Any remaining debt has prompted MAG and most of its brands to file for  relief under Chapter 11 bankruptcy; according to court papers.

MAG, which owns some of the biggest names in the motorcycle industry,  including the parts/apparel distributor Tucker Rocky, Vance & Hines,  Roland Sands Design (under Performance Machines), and J&P Cycles,  released a statement that was filled with confusing financial jargon,  but regardless of this debt-equity swap and Chapter 11, says operations  and customer service will continue uninterrupted.

MAG, Owner of Multiple Motorsports Brands, Files for Chapter 11

“Through this process, which we have been working very hard on with our  key lenders to accomplish over the past month, we will de-lever our  balance sheet allowing us to more effectively compete in today’s  evolving powersports market,” says MAG CEO Andrew Graves.

“MAG’s businesses will continue to operate unaffected and the Company  has sufficient liquidity to fund operations. Customer service and sales  will continue, employees will receive wages and benefits as before, and  vendors and suppliers will be paid in the ordinary course of business  going forward.”

Due to exchange of equity for $300 million in debt from its lenders  Monomoy Capital Partners, Blue Mountain Capital and Contrarian Partners,  MAG will now emerge with new owners and a new board of directors. MAG  reports that the future owners have “deep experience in consumer  products and lifestyle companies, including distribution, retail and  manufacturing.”

It’s worth noting that MAG also owns the Motorcycle USA, LLC, known as  MotoUSA, which ceased its online motorcycle news publication in February  2016 after 20 years of operations.

In regards to Chapter 11, court papers show 19 MAG brands have filed for debt relief, including MAG itself:

• Velocity Holding Company, Inc.
• Velocity Pooling Vehicle, LLC
• DFR Acquisition Corp.
• Ed Tucker Distributor, Inc.
• J&P Cycles, LLC
• Kuryakyn Holdings, LLC
• MAG Creative Group, LLC
• MAGNET Force, LLC
• Motorcycle Superstore, Inc.
• Motorcycle USA LLC
• Motorsport Aftermarket Group, Inc.
• Mustang Motorcycle Products, LLC
• Performance Machine, LLC (owns Roland Sands Design)
• Ralco Holdings, Inc.
• Rally Holdings, LLC
• Renthal America, Inc.
• Tucker Rocky Corporation
• Tucker-Rocky Georgia, LLC
• V&H Performance, LLC (Vance & Hines)

MAG expects says it expects to “emerge in the first quarter of 2018 as a stronger, better capitalized and competitive company.”

There are quite a few you recognize, right? It’s not good news at all.Now we wait and see how it sorts out. Hope they don't go the way of Custom Chrome.

Sourse: ultimatemotorcycling