By Wade Thiel
Essentially Chapter 11 Bankruptcy
Norton Motorcycles has one of those names that has a long history behind it. The future of the company, however, is questionable. Norton just went into administration in the UK, which is the equivalent of filing chapter 11 bankruptcy in the U.S.
Accounting firm BDO was appointed administrator of the motorcycle company. The reason the company went into administration is that it failed to make payment of £300,000 (about $393,000) that was owed to HM Revenue & Customs, according to Motorbike Writer.
Any deposits for bikes that have not yet been built will be returned to customers. BDO spokesman Lee Causer said the firm will “determine and execute the most appropriate strategy as swiftly as possible to protect creditors’ interests, bearing in mind the need to minimize distress for all parties”.
It’s important to note that administration in the UK does not necessarily mean the end of a company. It’s designed to protect the company from creditors. BDO will try to help Norton and the creditors reach the best possible outcome for the future.
This seems to be a long-time coming. The company has been mired in issues with customers and creditors for a few years now. Bikes were not being delivered, though deposits were taken. The company also launched a crowd-funding campaign that ended with a single anonymous investor spending £1 million (about $1,310,000). Despite this, Norton continued to struggle with money. All of the company’s issues came to a head and it has ended in administration.
The future of the company is unclear. This chapter of the Norton story is over, though I would expect someone with some money will come along and make Norton motorcycles again at some point. The brand has strong recognition and a long history. If it can be run properly the company could …read more