Originally Posted by cbojanower:
Sounds like the supplier has a bunch of them in the warehouse and wants to move them out
They should have shipped product much sooner. Too late, now that they filed for bankruptcy protection. Any recent money/product transfers will now be reviewed for preferential payments by the court.
Originally Posted by Rusty Traque:
Originally Posted by Bill T:
I guess the project was not profitable enough to continue operations. Maybe Lionel may want to take a stab at it and see if they can do the manufacturing without the red ink.
I suspect Nolan Plastics had problems before signing the contract with Lionel. The reasons for filing for bankruptcy don't happen overnight.
Rusty
I agree that Nolan's problems probably existed for a while, unless one of their major customers also recently went under or that this bankruptcy filing is due to Nolan not meeting one (or more) of their lenders financial covenants which caused their line of credit to be demanded in full.
Originally Posted by Rusty Traque:
Originally Posted by Bill T:
I suspect Nolan Plastics had problems before signing the contract with Lionel. The reasons for filing for bankruptcy don't happen overnight.
Rusty
I would have thought that Lionel's lawyers would have done a complete financial on the company before signing a contract.
Due diligence isn't infallible. Even in this so-called "information age" financial and operational data can be concealed, especially if the company is privately held.
I'm not accusing Nolan Plastics of cooking the books, just that they might have been having some problems before accepting the contract.
Rusty
Due diligence isn't infallible and reinforces the need for "skilled" lawyers and accountants/auditors to review potential subcontractor's financial and inventory data. A performance letter of credit would have helped Lionel.