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Indian Motorcycle
UNITED STATES PRESS RELEASE
$30 Million Merger
Debut of new motorcycle falls flat By Bill Vlasic / The Detroit News Tuesday, November 10, 1998
Indian
Motorcycle UNITED STATES PRESS RELEASE
$30 Million Merger; Company Ends Indian Motorcycle Trademark Dispute
November 5, 1998… In a $30 million merger, American Indian Motorcycle
Company, Indian Motorcycle Company, Inc., California Motorcycle Company
and six related companies and merging to become the second largest
producer of heavy cruiser motorcycles in North America. The Company will
spend in excess of $17 million to purchase the trademark rights of
Indian Motorcycle in the United States from the receivership of Indian
Motorcycle Manufacturing, Inc., finally consolidating the trademark in
North America and ending more than 45 years of confusion around
trademark ownership.
The Indian Motorcycle, which was manufactured in Springfield
Massachusetts and known as “the pride of the American road” was an
American icon. It was the preeminent American Motorcycle from 1901 and
1953.
According to Murray Smith, CEO of Indian Motorcycle Company, Inc., the
hearing that will finalize the sale of the trademark will take place in
the Federal District Court of Colorado on November 1925, 1998. “For the
first half of the century there was an intense ongoing competition
between two motorcycle giants,” Smith says, “And now there’s going to be
one again.”
Receiver Blocks Indian Motorcycle Estate
DEARBORN, Mich., Nov. 9 About 200 members of the Indian
Motorcycle receivership estate were prohibited yesterday by
court order from viewing the new Indian Motorcycle prototype
developed by Eller Industries, Inc. ("Eller") (OTC Bulletin
Board: ELRI). And some 20 members of the business media
who came to a press conference here today also did not get a
promised view of the prototype heritage-cruiser based on the
Indian legacy. According to Eller President Leonard S.
Labriola, a last-minute injunction halted the presentations
of a motorcycle which would revolutionize the industry.
"In furtherance of its commitment to rebuild the Indian
Motorcycle Company, Eller has invested over $1.5 million in
a prototype that some members of the motorcycle press
believe will set the new standard for motorcycles," he said.
"Designed by James Parker and engineered and fabricated by
Roush Industries of NASCAR fame, this was the motorcycle
most members of the estate had been anticipating for more
than five years." John Petitto, already a major motorcycle
dealer and a beneficiary of and major investor in the Indian
receivership estate said, "How dare this receiver tell me
what I can and cannot see. These are our trademark assets he
is selling, not his. I don't understand how the man who is
supposed to be focused on protecting our interests can act
in a way so contrary to what the members of the estate want
him to do.
"I speak for most members of the estate when I say that we
believe that Eller is getting railroaded here, and we are
not going to sit by and watch it happen. We want the Indian
Motorcycle Company to be American owned, we want the Eller
plan, and the Eller Indian. Don't forget, the receiver does
not own the trademark assets, we do. And we want the company
to move forward under the Eller contract."
Eller Industries was the uncontested purchaser of the
Indian Motorcycle trademarks until recently when the
receiver terminated the contract. "As there has yet to be
a hearing on the matter, there is no way to know what the
receiver's reasons were for trying to terminate the Eller
contract., said Labriola. "It's kind of like losing a
lawsuit before learning you have been sued." Robert Lutz,
Chrysler Corporation vice chairman (retired) and Eller
advisor said, "We're stunned. This event has been planned
for six weeks, and the motorcycle has been under intensive
development for eight months at a cost of over $1.5-million.
Why the court waited until the last minute to quash the
unveiling is a mystery to everyone." Despite many estate
members being notified prior to the gathering the motorcycle
would not be shown, nearly 200 still traveled to Detroit
from as far away as Southern California.
The order prohibiting the motorcycle's display was received
by fax the evening of Thursday, November 5th. This left
Eller and its attorneys one day to convince the receiver
that his beneficiaries should be allowed to see the bike.
"Unfortunately, he did not give his final word, which was
in effect 'Absolutely Not,' until late Friday afternoon,"
reported Labriola. "This kept our staff on the phone until
after midnight trying to warn people to allow them to change
their travel plans." The Eller Prototype is designed to
echo the styling themes developed by the legendary Indian
Motorcycle Company before it ceased 52 years of production
in 1953. Since then, the Indian name has retained a unique
cachet -- America's original motorcycle company predating
Harley-Davidson -- with restored Indian motorcycles selling
for as much as $50,000 or more, and the immediately
recognizable Indian script and headdress logo appearing on a
wide assortment of consumer goods.
Labriola described to both gatherings the plans to
resurrect the name as well as those of manufacturing the
motorcycles in a factory near Myrtle, OR, on land owned by
the Cow Creek Band of Umpqua Tribe of Indians.
"The Cow Creek Band is a major investor in this project,"
said Labriola. "This program is seen by Tribe leaders as a
means of investing casino earnings into broadening the
economic infrastructure of the Cow Creek Band. Its
establishment would go a long way in helping a region beset
by economic hardships due to downturns in the mining and
forestry industries."
Debut of new motorcycle falls flat By Bill Vlasic / The Detroit News Tuesday, November 10, 1998
DEARBORN -- The event was billed as the world debut of a new
Indian motorcycle prototype and a chat with its chief adviser, retired Chrysler Corp.
Vice-Chairman Robert Lutz.
Lutz was there, but the Indian was kept out of sight by a court order
in the latest round of legal wrangling over who owns the rights to the venerable
motorcycle trademark.
"The investors in Indian are getting a raw deal," Lutz said
at a press conference Monday at the Ritz Carlton Hotel.
Lutz is a consultant to Eller Industries Inc., a Niwot, Co.-based firm
that won a contract in January to buy the assets of the defunct Indian Motorcycle Co. out
of court-ordered receivership.
But Indian's court-appointed receiver, Richard Block, voided the deal
last month and gave the contract to a consortium of nine companies headed by Toronto
businessman Murray Smith.
Last Thursday, a federal judge in Colorado prohibited Eller Industries
from publicly showing its version of a new Indian. It's another bizarre chapter in the
strange saga of a motorcycle company that hasn't made a bike in 45 years.
"The receiver is trying to throw us out of our contract,"
said Eller President Leonard Labriola. "It's outrageous."
There have been several attempts in recent years to revive Indian,
which was the American pre-eminent motorcycle brand from 1901 to 1953. One group took
deposits from prospective buyers and dealers, but went bankrupt. A receiver was named in
1995 to administrate the combined "estates" of various creditors.
Eller thought it won the rights to the Indian trademark with a
$20-million bid. But Block awarded Indian to another group last month for $17 million.
That group is headed by Smith, who said Monday that, "Eller was
terminated by the court because it didn't live up to its obligations."
Labriola charged that Block was influenced by a $20,000-a-month
"wind down" fee to be paid by Smith's group. Block did not return a telephone
call Monday to his Englewood, Co., office.
Lutz vowed to stick by Eller in its legal battle for Indian. "It
would be wrong of me to abandon this group now," Lutz said.
The entire dispute appears headed for a contentious court hearing
scheduled for Nov. 25 in Denver.