On October 7, 1992 (the “Petition Date”), Schwinn Bicycle Company and eight of its subsidiaries (collectively, the “Debtors” or “Schwinn”) filed petitions for relief under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. § 101 et seq. (the “Code”). The subsidiaries of Schwinn Bicycle Company that filed for bankruptcy relief were Schwinn Sales West Inc., Schwinn Sales Midwest Inc., Schwinn Sales East Inc., Paramount Design Group Inc., Excelsior Fitness Equipment Co., Schwinn Bicycle Co.
F. Goodrich bicycles, sold in tire stores, Schwinn eliminated the practice of producing private label bicycles in 1950, insisting that the Schwinn brand and guarantee appear on all products. In exchange for ensuring the presence of the Schwinn name, distributors retained the right schwinn beach cruiser to distribute Schwinn bikes to any hardware store, toy store, or bicycle shop that ordered them. W. Schwinn tasked a new team to plan future business strategy, consisting of marketing supervisor Ray Burch, general manager Bill Stoeffhaas, and design supervisor Al Fritz.
The Paramount was developed for track and road racing by Emil Wastyn, a 6 day racing frame builder, mechanic and Schwinn dealer in Chicago, who immigrated from Belgium. The flat-bladed forks were also forged. The Typhoon probably dates from the late ’50’s or ’60’s. If I recall, it was what Schwinn called a “cantilever” frame, where the seat stays pass by the seat cluster and continue on in a graceful curve to join the bottom of the head tube. Older Schwinn “cruisers”, such as the Excelsior that was the inspiration of the first mountain bikes, used a straight lower top tube from the bottom of the head tube to the seat tube.
In the summer of 1992, Schwinn began to experience serious financial problems. Gary E. Thorholm (“Thorholm”), Schwinn Bicycle Company’s former assistant treasurer, testified that beginning in the summer of 1992, he took control of the operating accounts of Schwinn’s affiliates. Specifically, the affiliates would prepare checks and send them to Thorholm, who would then decide whether the checks should be sent to vendors or held. In this manner, Schwinn Bicycle Company determined which vendors, including True Fitness, would be paid. The Defendant is a Missouri corporation which, at all relevant times, has been in the business of producing and selling exercise treadmills for home use and treadmill parts.
Stallings claimed that he gained familiarity with the contractual payment terms which Precor offered to its dealers through certain conversations he had with Precor dealers during his tenure at the Defendant. Stallings Tr., p. 74 (lines 1-11). As a result of his discussions with certain Precor dealers, Stallings asserted that Precor’s contractual terms to its dealers for payment were 30 days after invoice, the same contractual terms offered by the Defendant. Stallings Tr., p. 75 (lines 6-13). Stallings’ testimony on the ordinary business terms in the treadmill industry was based on and limited to only his purported familiarity with Precor’s contractual terms. Thus, the Defendant did not present any evidence as to the contractual payment terms offered by any of the other manufacturers in the treadmill industry.
Steege v. Affiliated Bank/North Shore National (In re Alper-Richman Furs, Ltd.), 147 B.R. 17 (Bankr.N.D.Ill. 1992); Chaitman, 62 B.R. Further, post-petition extensions of unsecured credit to the debtor are not encompassed by Bankruptcy Code § 547(c)(4) and may not be set off against prior preferential transfers to reduce the creditor’s preference exposure.
If the badge is missing, you may still have a Schwinn. The manufacturer distributed unbranded or rebranded bikes through other companies, especially prior to the 1950s. Schwinn said he didn’t shutter his company because demand for high-quality craftsmanship has dried up. He said the main reason was that three of his seven employees were at or nearing retirement age, including himself at 69. In the 1980s, Waterford Precision started building cyclocross bikes. They are similar to the gravel bikes popular today, which also handle well on a range of surfaces.
By 1957, the Paramount series, once a premier racing bicycle, had atrophied from a lack of attention and modernization. Aside from some new frame lug designs, the designs, methods and tooling were the same as had been used in the 1930s. After a crash-course in new frame-building techniques and derailleur technology, Schwinn introduced an updated Paramount with Reynolds 531 double-butted tubing, schwinn dealers Nervex lugsets and bottom bracket shells, as well as Campagnolo derailleur dropouts. The Paramount continued as a limited production model, built in small numbers in a small apportioned area of the old Chicago assembly factory. The new frame and component technology incorporated in the Paramount largely failed to reach Schwinn’s mass-market bicycle lines. In 1963 following the death of F.
Despite the substantive consolidation of Debtors’ estates, the new value advanced by True Fitness should be calculated on a debtor-by-debtor basis for reasons discussed in the Conclusions of Law. The difference stems from the fact that there is more excess new value, which cannot be used to offset later preferential transfers, when the Debtors are treated as separate entities. See Brown v. Shell Canada, Ltd. (In re Tennessee Chemical Co.), 159 B.R.
Others look to the state law rate of interest. Pearson Indus. Inc., 152 B.R. At 560 (where an adversary is based on state law, state will control the award of prejudgment interest). Defendant argues that the Committee’s argument for Debtors to be treated as separate entities in determining the extent of True Fitness’s § 547(c)(4) defense is inconsistent with the Committee’s previous treatment of Debtors as a consolidated entity in proving them to be insolvent.