Let me start off by saying that our sister company, AtlantaHobby.com has done business with Hobbico for many years. The RC community, while small, is a very tightknit industry. The Hobbico team are close friends of ours, and like most friends do, we support them. You may have heard the recent news regarding Hobbico’s decision to file for bankruptcy.
The company released a statement yesterday announcing its decision to file for bankruptcy. According to the official statement, Hobbico has filed a petition for relief under Chapter 11 of the United States Bankruptcy Code while it seeks an orderly finalization and implementation of its comprehensive restructuring plan. The petition was filed today with the United States Bankruptcy Court – Wilmington of Delaware In conjunction, Hobbico also announced its plan to sell the company.
Since 1971, Hobbico has grown into one of the largest United States distributors of radio-control and general hobby products.While the company has been in business for many years and seen much success, our industry is very tough. Hobbico’s debt has added too much leverage for the Company, and it has been unable to successfully restructure to help meet its financial obligations. Changes in consumer trends and shopping habits have created significant challenges for many companies including Hobbico.
Hobbico intends to use the bankruptcy filing, and possible sale of the business, in order to reduce debt, to restructure liabilities, and attract new investors, positioning the company for future growth. The company carefully evaluated this, as well as a number of other actions, but ultimately decided this was the best path forward.
“Taking the necessary step to file for bankruptcy is difficult, but it will help preserve the value of our business and it’s the right thing to do for our company and our employees,” added Brownstone. “Under the process afforded to us under Chapter 11, we hope to reach an agreement with our creditors that will allow us to implement a restructuring plan that fully addresses our financial challenges while simultaneously identifying a prospective buyer that shares our vision of providing the best possible outcome for our employees and the future of Hobbico.”
It’s important to know Hobbico will continue to operate the business throughout the bankruptcy process. In the past, numerous companies across a range of industries (automotive, airlines, etc.) have used this type of filing as a tool to get costs under control, create stability, and build platforms for growth.
We wish Hobbico all of the best during this transitional period and ask that you help by sharing the full story behind this decision. We appreciate your continued support and if you have questions or comments please feel free to leave them in the comments section below.