Universal Gym Equipment is set for auction next month under the ongoing Ch. 11 bankruptcy reorganization plan filed by its owner Flexible Flyer.
According to court documents obtained by SNEWS®, Universal will hit the auction block May 12 in the U.S. Bankruptcy Court, Northern District of Mississippi, where Flexible Flyer Acquisition Corp. (FFA) filed for reorganization on Sept. 9, 2005. Already FFA has auctioned off or is preparing to liquidate other divisions: Flexible Flyer, its toy division, was sold to Troxel Products; and Yerf Dog, its wheel-goods division, is being prepared for liquidation through auction, similar to Universal.
In the case of Universal, the auction overseen by U.S. Judge David Houston III, is to sell all assets free and clear of liens, claims and interests. True Fitness filed with the court on March 13 a letter signed by CEO Frank Trulaske as the trustee of "True Universal LLC," stating the Missouri company's intent to purchase the assets of Universal, including its name, trademarks, websites, intellectual property as well as contracts and licensing agreements between Universal and Kevin Lamar and Lamar Fitness. Lamar has licensed the Universal name for sporting goods and cardiovascular equipment for just over 18 months. A search of the Missouri Secretary of State records showed no record of a company by the name of True Universal LLC.
True stated in the letter, which was filed with the court April 6 by FFA attorneys, that it is willing to buy Universal assets for $500,000. The bid will be placed at the May 12 auction, which will also be open to other bidders, who must have submitted their offers by May 8. The court is expected to approve a buyer at auction. As the "stalking horse" bid, or the first approved bid, True's offer must be beat to participate in or win the auction.
Lamar told SNEWS® he will protect his interests in the name.
"I am very very interested in protecting our opportunities for the use of the Universal brand," Lamar said. "We've helped build equity in that brand and we may work with other interested parties who may bid. We're keeping our options open."
True did not return a call for comment.
Bob Lochner, former director of Universal Gym, stayed with the company through Feb. 28, then moved on to Troxel Products LLC, which bought Flexible Flyer, as the vice president of sales for the toy division. He had worked with Universal under FFA ownership for five years.
FFA, through its owner Cerberus Partners, now Cerberus Capital Management, bought Universal Gym assets in the late '90s in a bankruptcy auction. Universal, a brand name known by many in and out of the fitness world, was founded in 1957 and was the company that developed the first multi-station selectorized gym.