Huffy Corporation has filed its proposed Plan of Reorganization and related Disclosure Statement with the U.S. Bankruptcy Court, planning to emerge as a private entity focused on its Huffy Bicycle, Tommy Armour Golf, and Ram Golf brands. While the efforts of a Chinese company to acquire Chevron and the successful acquisition of the U.K.s MG/Rover by a Shanghai concern have been getting all the headlines, this will signal the first U.S. sporting goods company that will be owned by an arm of the Chinese government.
As SEW first reported in SEW_0527, the Sinosure Group, which is comprised of the China Export & Credit Insurance Corporation and Huffy's primary bicycle suppliers in China, will receive 30% of Huffys new voting common equity in the form of new Class A shares and a $3 million note.
The Class A common shares will entitle The Sinosure Group to elect the majority of Huffys board of directors. In addition to this control over the board, the Sinosure Group will have the ability to earn up to 51% of the aggregate new common voting stock over the next 5 years. Other general unsecured creditors will get 70% of the new common equity in the form of new Class B shares and a $9 million note. The notes and post-confirmation trade credit will be secured by two separate liens on Huffys assets.
Huffy Corporation and certain of its subsidiaries filed for Chapter 11 bankruptcy protection in October 2004. HUF subsequently sold its Huffy Sports unit to Russell Corporation and it is now part of the Spalding Group, a wholly-owned subsidiary of Russell Corp.