New York motorcycle riders may be interested to learn that in early September 2015, San Francisco’s Mission Motorcycles, Inc., filed for bankruptcy. The company, which had initially garnered favorable press coverage for its line of electric motorcycles, entered its Chapter 7 filing in the midst a number of lawsuits that pitted one of the company’s founders against the firm.
Reports said that the first lawsuit, which dates back to 2013, revolved around the allegation that one of the founders put his name to a stock restriction agreement. This document supposedly gave Mission Motorcycles the right to buy the man’s stock shares upon his departure from the company, but after he was fired in November 2013, he claimed that he had been tricked into signing the restriction clause under false pretenses. He subsequently filed his own countersuit, and his attorney said that regardless of the bankruptcy filing, he plans to pursue legal action against the company’s CEO and its former lawyer.
Writing to the court, the company’s CEO claimed that the situation had become so severe that the firm couldn’t pay its attorney’s fees. In May, a court decided that the company’s lawyer could quit working on the existing cases because Mission Motorcycles wasn’t paying him.
Filing for Chapter 7 bankruptcy may not always provide the relief people need to continue in business or keep on fulfilling their professional roles. When other legal actions have already been initiated, CEOs and other executives could face personal allegations that reduce their capacity to manage their firms in a time of crisis. Although restructuring and liquidation may be viable ways to keep a company alive, they’re not universal solutions, and an attorney may be able to suggest other alternatives.
Source: NorthJersey.com, “Electric motorcycle company co-founded by Fort Lee man filing for bankruptcy”, Hugh R. Morley, Sept. 8, 2015