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trisports filing for chapter 11 (moderator's edit)
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anyone know anything? i know a vendor who received a letter today saying as such. he's in a long line of vendors awaiting payment apparently.

[orginal thread title was chap 13, which is false - it's chap 11 - moderator]
Last edited by: Slowman: Jun 19, 13 15:50
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Re: trisports filing for chapter 13 [ericj076] [ In reply to ]
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Don't mind me, just fixing some popcorn.

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Re: trisports filing for chapter 13 [ericj076] [ In reply to ]
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Re: trisports filing for chapter 13 [ericj076] [ In reply to ]
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I don't know anything, but I suspect plenty. This comes right after they opened a second store. (And already closed it.) They overreached with the expansion, as did many other businesses over the years. It wouldn't surprise me if they got a loan to open that second store, and the store was a bust, and they couldn't pay the loan back.
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Re: trisports filing for chapter 13 [Dilbert] [ In reply to ]
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I'd just take the letter at face value. Not uncommon that if you have a line of credit and lose it to have big issues paying bills.

Styrrell
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Re: trisports filing for chapter 13 [styrrell] [ In reply to ]
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sorry, but as a banker I highly doubt the bank just up and called their line and equipment loans without warning. No judge in America would side with a bank on a "technical default" (ie missed a covenant) if the bank sues on a technical default. Something smells fishy here.
Last edited by: Fruitcake: Jun 19, 13 14:09
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Re: trisports filing for chapter 13 [ericj076] [ In reply to ]
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I just want to throw this out there if / before things get ugly in here. I know Seton and Debbie (the owners), and the are two of the nicest people you're likely to meet. They're a huge supporters of the Triathlon community and the Tucson community. There may have been mistakes or misjudgments and it's unfortunate. I was saddened to hear this news.


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Re: trisports filing for chapter 13 [ericj076] [ In reply to ]
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HUGE
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Re: trisports filing for chapter 13 [ericj076] [ In reply to ]
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Wow.....this took awhile to get here. Curious as to why the "press release" was submitted to XTri and not ST. Or maybe it was....

I am saddened beyond belief, but not at all surprised.

G


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Post deleted by ZackCapets [ In reply to ]
Re: trisports filing for chapter 13 [ericj076] [ In reply to ]
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Not surprised. I only ever tried ordering from trisports.com three times, but all three times the items were placed on back order, despite showing as "in stock" on the ordering page, and all three times, it took them a week to tell me it was on back-order, resulting in me canceling. It's hard to keep a positive cash flow operating that way.
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Re: trisports filing for chapter 13 [tpero] [ In reply to ]
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tpero wrote:
Not surprised. I only ever tried ordering from trisports.com three times, but all three times the items were placed on back order, despite showing as "in stock" on the ordering page, and all three times, it took them a week to tell me it was on back-order, resulting in me canceling. It's hard to keep a positive cash flow operating that way.

Were you buying sale items? If so, then there were probably a ton of other people that wanted the same product you did and others' orders were fulfilled first. The item probably *was* in-stock, just not a million quantity at super-low price.

Side note, I did try to buy a wheelset a couple years back from a company that didn't keep stock in the wheels, but rather purchased them to resell them whenever they received an order for that item. They listed the wheelset for the price of one wheel, I noticed it and paid, and they never sent my goods. I nearly took them to court over it before they finally sent my money back.

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Re: trisports filing for chapter 13 [ZackCapets] [ In reply to ]
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I don't remember what they were exactly as it was probably two years ago, but they definitely weren't clearance items - I think a set of replacement aerobar pads once and some tri shorts another.


ZackCapets wrote:
tpero wrote:
Not surprised. I only ever tried ordering from trisports.com three times, but all three times the items were placed on back order, despite showing as "in stock" on the ordering page, and all three times, it took them a week to tell me it was on back-order, resulting in me canceling. It's hard to keep a positive cash flow operating that way.


Were you buying sale items? If so, then there were probably a ton of other people that wanted the same product you did and others' orders were fulfilled first. The item probably *was* in-stock, just not a million quantity at super-low price.

Side note, I did try to buy a wheelset a couple years back from a company that didn't keep stock in the wheels, but rather purchased them to resell them whenever they received an order for that item. They listed the wheelset for the price of one wheel, I noticed it and paid, and they never sent my goods. I nearly took them to court over it before they finally sent my money back.
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Re: trisports filing for chapter 13 [Fruitcake] [ In reply to ]
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Fruitcake wrote:
sorry, but as a banker I highly doubt the bank just up and called their line and equipment loans without warning. No judge in America would side with a bank on a "technical default" (ie non payment default) if the bank sues on a technical default. Something smells fishy here.

who says it was a "technical default"? Lines of credit have maturity dates. Typically one year at a time, maybe 2 for a really strong borrower. If you get to the maturity date and the bank won't extend, it's not a "technical default"; it's a payment default. As a banker's lawyer, I've seen plenty of borrowers file with for bankruptcy protection as the result of non-renewal of a line of credit. I'm not implying it was totally out of the blue, but if you can't get another lender to refinance because your financial condition is worse or the credit environment is changed (or usually both) and your existing lender won't extend, you are going to file.
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Re: trisports filing for chapter 13 [mr. mike] [ In reply to ]
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mr. mike wrote:
Fruitcake wrote:
sorry, but as a banker I highly doubt the bank just up and called their line and equipment loans without warning. No judge in America would side with a bank on a "technical default" (ie non payment default) if the bank sues on a technical default. Something smells fishy here.


who says it was a "technical default"? Lines of credit have maturity dates. Typically one year at a time, maybe 2 for a really strong borrower. If you get to the maturity date and the bank won't extend, it's not a "technical default"; it's a payment default. As a banker's lawyer, I've seen plenty of borrowers file with for bankruptcy protection as the result of non-renewal of a line of credit. I'm not implying it was totally out of the blue, but if you can't get another lender to refinance because your financial condition is worse or the credit environment is changed (or usually both) and your existing lender won't extend, you are going to file.

I would go with that above, but read into the fact that they called their equipment loan too. These are 99.9% of the time closed ended terms loans. Given maybe they are cross collateralized with cross default language etc, who knows.
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Re: trisports filing for chapter 13 [mr. mike] [ In reply to ]
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Agreed. And all those "unpaid vendors" best not expect any payment anytime soon. And when payments do resume they will probably be spread out over a very long period of time. Being in business for alot of years now I cringe everytime I see a letter from a bankruptcy trustee. I bought alot of things from TriSports at one time. Hate to see them having problems.
Last edited by: arby: Jun 19, 13 12:57
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Re: trisports filing for chapter 13 [jeffp] [ In reply to ]
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jeffp wrote:
HUGE

+1

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Re: trisports filing for chapter 13 [arby] [ In reply to ]
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so are they basically going to be done now? No way their vendors are going to supply them unless it's COD. Will they basically have to go to a drop shipment type internet company?

I agree, I've bought a lot of stuff from them in the past and have been satisfied with the service etc. etc.
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Re: trisports filing for chapter 13 [Fruitcake] [ In reply to ]
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Not sure if they will be "done" but it will certainly be much more difficult for them to obtain financing. So unless they have other avenues to pursue regarding raising capital I would imagine it will be difficult if not possible to resume normal business. Inventory intensive businesses require alot of working capital. You either borrow it, raise it some other way (investors, capital markets etc) or generate it thru your current revenue stream.
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Re: trisports filing for chapter 13 [ericj076] [ In reply to ]
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So, um, does this mean that there's going to be a kickass sale soon?






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http://tri-banter.blogspot.com/
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Re: trisports filing for chapter 13 [Fruitcake] [ In reply to ]
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Fruitcake wrote:
mr. mike wrote:
Fruitcake wrote:
sorry, but as a banker I highly doubt the bank just up and called their line and equipment loans without warning. No judge in America would side with a bank on a "technical default" (ie non payment default) if the bank sues on a technical default. Something smells fishy here.


who says it was a "technical default"? Lines of credit have maturity dates. Typically one year at a time, maybe 2 for a really strong borrower. If you get to the maturity date and the bank won't extend, it's not a "technical default"; it's a payment default. As a banker's lawyer, I've seen plenty of borrowers file with for bankruptcy protection as the result of non-renewal of a line of credit. I'm not implying it was totally out of the blue, but if you can't get another lender to refinance because your financial condition is worse or the credit environment is changed (or usually both) and your existing lender won't extend, you are going to file.


I would go with that above, but read into the fact that they called their equipment loan too. These are 99.9% of the time closed ended terms loans. Given maybe they are cross collateralized with cross default language etc, who knows.

Reads like all of the above. LOC, probably blew covenants repeatedly and did not have a good handle on projections. LOC was not extended, cannot find a takeout bank, LOC matured and bank accelerated the equipment loan as well. Chapter 11, so it will be interesting to see if they can get a plan together acceptable to the court. They will need to find a DIP lender or equity in the near term or this will flip to a Chapter 7.
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Re: trisports filing for chapter 13 [saltman] [ In reply to ]
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saltman wrote:
Fruitcake wrote:
mr. mike wrote:
Fruitcake wrote:
sorry, but as a banker I highly doubt the bank just up and called their line and equipment loans without warning. No judge in America would side with a bank on a "technical default" (ie non payment default) if the bank sues on a technical default. Something smells fishy here.


who says it was a "technical default"? Lines of credit have maturity dates. Typically one year at a time, maybe 2 for a really strong borrower. If you get to the maturity date and the bank won't extend, it's not a "technical default"; it's a payment default. As a banker's lawyer, I've seen plenty of borrowers file with for bankruptcy protection as the result of non-renewal of a line of credit. I'm not implying it was totally out of the blue, but if you can't get another lender to refinance because your financial condition is worse or the credit environment is changed (or usually both) and your existing lender won't extend, you are going to file.


I would go with that above, but read into the fact that they called their equipment loan too. These are 99.9% of the time closed ended terms loans. Given maybe they are cross collateralized with cross default language etc, who knows.

Reads like all of the above. LOC, probably blew covenants repeatedly and did not have a good handle on projections. LOC was not extended, cannot find a takeout bank, LOC matured and bank accelerated the equipment loan as well. Chapter 11, so it will be interesting to see if they can get a plan together acceptable to the court. They will need to find a DIP lender or equity in the near term or this will flip to a Chapter 7.
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Re: trisports filing for chapter 13 [Kkennison] [ In reply to ]
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Kkennison wrote:
saltman wrote:
Fruitcake wrote:
mr. mike wrote:
Fruitcake wrote:
sorry, but as a banker I highly doubt the bank just up and called their line and equipment loans without warning. No judge in America would side with a bank on a "technical default" (ie non payment default) if the bank sues on a technical default. Something smells fishy here.


who says it was a "technical default"? Lines of credit have maturity dates. Typically one year at a time, maybe 2 for a really strong borrower. If you get to the maturity date and the bank won't extend, it's not a "technical default"; it's a payment default. As a banker's lawyer, I've seen plenty of borrowers file with for bankruptcy protection as the result of non-renewal of a line of credit. I'm not implying it was totally out of the blue, but if you can't get another lender to refinance because your financial condition is worse or the credit environment is changed (or usually both) and your existing lender won't extend, you are going to file.


I would go with that above, but read into the fact that they called their equipment loan too. These are 99.9% of the time closed ended terms loans. Given maybe they are cross collateralized with cross default language etc, who knows.


Reads like all of the above. LOC, probably blew covenants repeatedly and did not have a good handle on projections. LOC was not extended, cannot find a takeout bank, LOC matured and bank accelerated the equipment loan as well. Chapter 11, so it will be interesting to see if they can get a plan together acceptable to the court. They will need to find a DIP lender or equity in the near term or this will flip to a Chapter 7.

15 year seasoned corporate banker, thus seen situations like this multiple times. First, rarely does a company say they are late on their bills, thus the bank canceled their LOC, etc. Than bank always gets the first blame because it's easy. The business owner never sees the same level of risk the bank sees. The business owner also has a tendency to believe a bank is a partner in the business, which they are not.

LOC's mature anywhere from 1-3 years, depending on size. Bank can opt not to mature for any reason. Maybe they just don't want to lend to retail business. Don't matter. Blown covenants can trip default, however rarely do. Blown covenants usually result in additional monitoring and an increase in interest rate. Again, all relevant to size of the relationship. The smaller the relationship, the tougher the bank will be. What's small to one can be huge to another bank, so again relevant.

Contrary to public opinion, banks do not like seeing their clients in bankruptcy (or foreclosures). The collection rate drops significantly. With that said, I've pushed clients into bankruptcy because that was the only option left for whatever reason. Blaming the bank like Trisports is doing is just a smoke screen for the real problem.

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Re: trisports filing for chapter 13 [AlwaysCurious] [ In reply to ]
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No way, that's so subtle it get's like +1000000


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Re: trisports filing for chapter 13 [sentania] [ In reply to ]
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sentania wrote:
No way, that's so subtle it get's like +1000000

Maybe that's why they brought him in! Experience

Or, everywhere he goes bad things happen. Felt is next

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