A Plan to Jump-Start Company
Famed hot rod builder Boyd Coddington would reclaim the publicly traded company he lost in a bankruptcy earlier this year under a reorganization plan filed Monday for Stanton-based Boyds Wheels Inc.
The plan, which still must be approved by creditors, calls for Coddington to return to the custom wheel and hot rod design company he founded.
Unsecured creditors--mainly materials suppliers--would own a 6% stake in the company in a debt-for-equity swap, while City National Bank, the company’s largest secured creditor, would receive an additional 6% stake and repayment in cash of about $5 million of the $8.1 million it is owed.
Coddington, who would be chairman, chief executive and major shareholder, would put in almost $700,000 cash. His son, Boyd Coddington Jr., would merge the assets of his Stanton-based wheel business, NRG Motor Sports Inc., into the new Boyds Wheels, said attorney Evan Smiley, who filed the reorganization plan in federal Bankruptcy Court in Santa Ana.
“I’m feeling pretty excited,” Coddington said in a brief interview Monday evening. “I think we’ve got a pretty good plan going forward.”
Smiley, whose Costa Mesa bankruptcy law firm Albert, Weiland & Golden, represents Boyds Wheels, said the company would emerge from the Chapter 11 bankruptcy “a substantially different company” with almost all of its products manufactured under contract in Asia.
Coddington said, however, that the expensive one-piece aluminum wheels that built the company’s reputation would continue to be made at Boyds Wheels in Stanton.
Coddington--who became famous for his exquisite and pricey custom hot rods--jumped into the wheel business in 1988 because he could not find other custom wheels that worked with the cars he was building. Within a few years, the wheel business eclipsed the hot rod business in annual sales. Coddington took it public in 1995 and in 1996 reported record sales of $27 million.
He ran into trouble at the end of that year, however, after spending more than $15 million--most of the company’s cash and credit--to expand production capacity. The project was completed just as the market for high-end custom wheels softened.
A production glitch also hurt when Boyds had to scrap hundreds of thousands of dollars worth of sub-par wheels made on one of the newly purchased machines.
Coddington was never able to recover from the blow and all during 1997 revenue continued falling while losses rose--leading to the company’s Jan. 30 bankruptcy filing this year.
If creditors approve the reorganization plan, Smiley said, a revamped Boyds Wheels could be up and running by the end of the year.
A hearing has not yet been scheduled.
