$73 million in debt and looking to sell: Rad Power Bikes files for Chapter 11 bankruptcy protection amid mounting pressures
Management aims to restructure its finances and sell the company within the next 45 to 60 days
Rad Power Bikes has filed for Chapter 11 bankruptcy protection, in an effort to safeguard itself from mounting challenges while reorganising its finances as part of a potential sale.
Once one of the most prominent names in the e-bike market, the Seattle-based brand has spent the past year grappling with financial, legal and product-related challenges. And this filing comes just weeks after the U.S. Consumer Product Safety Commission (CPSC) issued an urgent warning, advising consumers to immediately stop using some of Rad's batteries due to fire risk. The CPSC said Rad “refused to agree to an acceptable recall” as the company is unable to offer replacement batteries or refunds to the affected customers. Rad also told Cycling Weekly that it stands by its products, which were tested and deemed safe by a third party.
Court documents show that Rad Power Bikes owns around $32 million in assets while owing nearly $73 million to creditors. A large portion of the outstanding debt includes more than $8 million in unpaid U.S. import tariffs, as well as millions owed to overseas manufacturers. The company is also facing claims linked to insurance payouts and legal cases, including individual claims relating to alleged damages.
Chapter 11 bankruptcy is designed to allow a company to continue operating while it restructures its debts and obligations under court supervision, rather than shutting down immediately.
For Rad Power Bikes, the filing triggers an automatic stay, which typically pauses most litigation and collection efforts while the company works through the process.
Chapter 11 may also allow Rad to seek new financing, restructure insurance arrangements, or reduce other costs in order to fund ongoing operations,” meaning Rad can continue selling bikes and providing customer support while the case unfolds.
Rad Power Bikes intends to continue operating during the bankruptcy process and hopes to sell the company within the next month or two.
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"We are not giving up," Rad told Bicycle Retailer. "We remain deeply committed to our customers and community, and we are focused on doing everything we can to strengthen the future of the Rad brand.
"This step allows us to keep operating in the ordinary course of business while we pursue the best possible outcome for the people who rely on Rad every day. Our goal is to keep the company intact and preserve the relationships we have built with riders, vendors, suppliers, and partners."
Cycling Weekly's North American Editor, Anne-Marije Rook is old school. She holds a degree in journalism and started out as a newspaper reporter — in print! She can even be seen bringing a pen and notepad to the press conference.
Originally from the Netherlands, she grew up a bike commuter and didn't find bike racing until her early twenties when living in Seattle, Washington. Strengthened by the many miles spent darting around Seattle's hilly streets on a steel single speed, Rook's progression in the sport was a quick one. As she competed at the elite level, her journalism career followed, and soon, she became a full-time cycling journalist. She's now been a journalist for two decades, including 12 years in cycling.
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