Hobbico Files Chapter 11

Well, typically the writing is on the wall way prior to this. When you have a company with so called employee owner shares, who makes these decisions? https://towerhobbies.com/thistory.html        

         Overspending, abusing privileges, mismanagement leads to these conditions. While I'm not a fan of what's happening, somewhere years ago, this train was derailed. If the employees are so called owners, I don't think the fate of their futures would've been left in this direction if they were in control. The overall impact of this goes far beyond the hobbyist not being able to purchase certain items any longer.  I believe they have close to 4000 employees who will more than likely be screwed out of their entitlements. While the employees are constantly brainwashed in being faithful and reliable, the rug is quickly pulled out from under them.

They took on way too much debt, the employees now own shares of a worthless company. They got screwed good.

Sad fact of the industry overall. With over $100 million is debt and total assets estimated at less than half of that the company is bleeding. It would be somewhat interesting to see their inventory levels. If they do not go into a full liquidation it is almost certain they will shed certain business lines.

I could see Hobby King buying a lot of their stuff.

Now I understand what the owner of our LHS meant by saying "There's trouble in Paradise " when I was there last week.
I went in to pick up a number of nuts, bolts, and small parts and the inventory was slim.
My first thought was the shop is nearly kaput, but the owner said they had to find other sources for the basic inventory Du-Bro, XONA, and etc. lines because Hobbico/Tower was out of inventory.
Once before, I heard that Tower has massive amounts of old RC gear when everything changed to 2.4GHZ.
I hated it when they picked up the Goldberg brand and the once local Lanier RC brand.
You kind of expected the squid to grab it all never to be seen again.

Oh Yes, remembering someone here had said that Top Flight Lustrekote was out of production now , I picked up the last can of Missile Red and the last can of Cub Yellow, my two favorites. The owner confirmed that.
FWIW

66 Malibu wrote:Oh Yes, remembering someone here had said that Top Flight Lustrekote was out of production now , I picked up the last can of Missile Red and the last can of Cub Yellow, my two favorites. The owner confirmed that.
FWIW

I grabbed the last red LustreKote can last week from my LHS also.  They have about six cans of various colors, and I was tempted to grab those also, but they would probably sit on my shelf for four or five years before I used them up, so I left them for someone else.

I needed some APC props last week, and went on the Tower website.  All but one size prop were out of stock, supposedly due mid-January.  I just ordered direct from APC.  Same price.  Maybe a little less shipping.  I need to make a list of O.S. parts I might need and order what they have at Tower before they're no longer available.  I ordered three NVA packages for the 25 and 46 LA-S engines three or four months ago for a R/C conversion and anticipating future bent needles.  Maybe I should order a couple more, knowing that I'll probably bend these in the near future...

The Not Too Greedy Mark

I like Luster Kote but noted almost a year ago many colors on Tower were pending order...went to Top Flit site and almost all wee listed as "unavailable"....writing on the wall similar to any Super Tiger Engine part....order pending for 3 years now

If Hobbico and Tower belly up it will probably mean some few suppliers crap out also...that is the real problem

Brodak and all the others will loose a source for thins desired by an ever shrinking customer base

OTOH it will open a very niche market for some of the more crafty suppliers

We have some many years yet of baby boomers entering retirement and all doing some nostalgia thing

BUT as we die off some time in the future---- model airplanes and glow engines will just be a bunch of museum curiosities

I snuck in under the wire last summer and ordered almost every color that Lusterkote offered from Tower, but beware of Hobby Shop cans.  I found the only can left of Lusterkote at my LHS got it home and it would not spray.  I knew the product was old when it was marked at $6.95 vice the on-line price of 7.99.

It is very bad news, it is always hard when a source of work is closed.
I hope that in some way it can resurface and that it does not become part of the past, it is too young to be left behind, something has to happen so that everything will shine again.

I’m thinking Hobby King and Nitroplanes cut a big chunk out of their sales. Possibly some mismanagement mixed with the overseas competition put them behind the 8 ball. I only used Tower for OS parts if they had them. I admit, I bought from both Hobby King and Nitroplanes due to price.

Swap meets. Grab all you can. I’ll be hitting my local one in Feb.

Rage! Against the dying of the light.

Well, they aren’t going down with out a fight!  Filing Chapter 11, lets them continue to operate while re organizing their business....they’ll probably shaft a few siuppliers or vendors in a attempt to stay afloat. I’d watch for “sales” of either product lines or divisions, like “real-flight”  to bring in cash to help keep the ship afloat. I think as a employee owned company, those employees are gonna bust their hump to keep the ship upright.

Quote:

Chapter 11:

Chapter 11 is the chapter used by large businesses to reorganize their debts and continue operating. Corporations, partnerships, and limited liability companies cannot use chapter 13 to reorganize and must cease business operations if a chapter 7 bankruptcy is filed. Chapter 11 cases are by far the most complicated of bankruptcy cases, and as a result, there are very few law firms that handle chapter 11 cases, but many times individuals and companies cannot obtain the relief they need under chapter 7 or chapter 13, thus a chapter 11 is their best option.

Corporations, limited liability companies (LLCs) and partnerships are not allowed to file for relief under chapter 13, thus Chapter 11 would be the only option for these entities if the one of these types of companies needs to reorganize and continue its operations.  If any of these types of entities files for relief under chapter 7, the company must end its operations upon the filing of the case.   UNQUOTE.

If they were in deep doo doo, and wanted out, they would have filed Chapter7!  So, I think there is hope of them “reviving “ and continue on smaller and slimmer.  A least I hope so.

Hope they can hang in there.  These are pretty depressing times as far as looking ahead in our hobby is concerned.  I'll REALLY take a hard hit if Brodak folds...I can only pre-buy/store so many cans of dope.

More and more the swap meets I go to consist of old guys bumping into each other as they spread out their collections on tables. Many are joking about clearing out their stuff so their wives won't have to deal with it when they die.  Surely a responsible attitude, but a major downer at the same time.

The only kids I've seen in the last two events were playing video games..obviously P.O.W.'s of their fathers or grandfathers, just putting in time 'til their ordeal is over.

We got to go out and have fun, boys.

I'm so glad I came across this thread because there's a bunch of stuff I'll be needing for the Cardinal.

I quickly opened a new tab and surfed over to my usual first stop, the Omni Models eBay store. They were out of my favorite $15 Dave Brown brushed aluminum 2" spinners, but had an identical polished spinner for ~ $18, so I dropped it in my cart. But they were out of the adapters. That may not be a supply problem, but rather a purchasing cut-back. I went ahead and got the spinner in hopes they'll get more adapters, but DB has them for 3x the shipping price. They were out of 4-40 Dubro brass inserts, so I had to get the more expensive Great planes brand. I got two colors of Monokote, Chrome and metallic blue, but only had chrome trim strips. They're also out of OS needle valves and have hardly any APC props and no 12x4s, which is my LA46 prop. They did have an 11.5x4, which I was tempted to try, but didn't.

This is unusual for Omni. I'don't recall them being out of stock on anything in the past. Maybe it's related or maybe it's not. I don't know how Omni fits into the puzzle of distribution. Just sayin'.

Now I'm starting to feel good, getting the itch, needing my stuff!
Rusty

Rusty, Omni models is Tower Hobbies/Hobbico. They're all one in the same so yes it's relative. Good to see you on here. Ken

They: "Hobbico" will have to do his part, Yes, his part seriously, administration and adjustments, but if I lived in the US, I would not hesitate to buy there, They "Hobbico" will have to bail out and manage their expenses, You are the ones they can generate the potential to finish closing the equation.
Do the truly possible for that factory, which is there, that gives work there, that generates products there, FOLLOW THERE!