Whither Audio Research

@DonH50, good summary. Again, I am just speculating but I am assuming that, if in fact a sale did occur, the bank knew exactly what it would get from the sale but agreed to accept less that it was owed because its liquidation analysis would project an even lower recovery from a foreclosure. The bank would then proceed agains the guarantor for the deficiency.
 
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secured crefitors get priority in bankrupcy
Not a lawyer, but based upon the three points @Nathanu made it looks like ARC owed the bank money, the bank agreed to the sale assuming it would cover the money owed to the bank, but the sale did not in fact generate enough to cover the debt to the bank, so now the bank is suing the new owner (Trent Suggs) f9or the money owed to it.
Pretty good Professor Don.
Secured credit. The bank lends you money for the express purpose of buying a car. They use the car as collateral. If you don't pay they can take the car and sale it. Rarely does that sale cover the amount owed the bank. The bank. The bank can pursue a deficiency judgement.

Secured creditors have priority over general creditors. Unsecured creditors get the leftovers. Think of it as preferred v common stock.
T o one is going to buy property with an unsatisfied security agreement.
Minnesota must be one oof those states that allows creditors to force the debtor into bankruptcy. This is a way to allow the creditors to get some money before all the assets are depleted.
If you are going to purchase a company, you want their liabilities to be clear before you assume the debt.
I am not a bankruptcy lawyer. There are very specific rules to follow. My guess is the bank is trying to force ARC into bankruptcy. I wonder what will happen if ARC is liquidated as opposed to being purchased outright. The former is not good for ARC survival.

That is based on my limited knowledge.
 
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I had read the situation slightly differently. From the press release I had understood that Val Acora had established a new company to continue the ARC brand (press release here: https://www.theabsolutesound.com/ar...ead-new-corporation-for-audio-research-brand/
relevant section states, “Valerio Cora, Founder and CEO of Acora Acoustics Corporation, will be at the helm of a new independent corporation dedicated to guiding the Audio Research brand toward a future that will grow its strengths and legacy.”) if that is correct then the new company would have bought the assets and goodwill from the original company. This sale of assets/goodwill to newco would presumably have been consented by the main creditors of the original company as a way of realising part of the debts owed. The creditors can then pursue whatever debt is outstanding against the guarantor of the original company (Trent Suggs).
If this is what has happened then it doesn’t really matter whether the original company is liquidated because it is essentially a husk. All the assets and goodwill (ie the brand, Audio Research) are now owed by a new company whose CEO is Val Acora.
At least that what I thought has happened….
 
If we just stick to the written script, this what we know.
Trent encumbered ARC and himself. He was unable to extricate either ARC or himself. ARC was put in the hands of Lighthouse.
ARC tried to remove itself from this status, but failed. The order signed by the judge on 5/22 firmly establishes that ARC cannot dispose of ANYTHING without Lighthouse as the initiator and controller. ARC must honor this and act in good faith. The purpose of Lighthouse is to assure that maximum value is obtained for the creditors. It is not to assure that ARC survives.
Trent’s case is separate. TWS is not in the hands of Lighthouse. He has admitted that the debts are legitimate and his hearings are separate from the ARC hearings.
In parallel with this we have Michael Fremmer facilitating two press releases which seem to be coordinated by Mr. Cora. Sadly, these press releases have no legal standing. It may be that they come true eventually, but they are not true today. There is no new ARC. The old ARC is being held by Lighthouse. If ARC hinders Lighthouse in any way (by selling, disposing or hiding assets), they are in violation of the judge’s orders.
Both Trent and ARC are in this as self represented… no lawyer is named for either. This is a lesson to those that hate hiring a lawyer. It is suicide to let your financial position degenerate to the point where you do not have the resources to pay a lawyer to protect you.

I am not a lawyer. I don’t play a lawyer on TV. I did not stay at a Holiday Inn Express last night. But I can tell you this. Navigating this morass without a good lawyer who can go nose to nose with Lighthouse is not going to be pretty.

I am VERY hopeful of a good outcome. But if there is one in the queue right now, you’ll need the foresight of a Tolkienien Elf to see it beyond the horizon.

I knew that the Lighthouse management would not be dissolved unless the creditors had been paid. When the “case closed” was posted with no other paperwork, I wrongly jumped to the conclusion (based on the Fremmer published press releases) that Mr. Cora had paid the creditors as part of his purchase deal. The Orders did not bear out my optimism.

If the Fremmer press releases had any purpose, it wasn’t to sway the court. It was to reduce the chatter.

As I noted before, aside from the legal record, all the other info surrounding this case is speculative gossip. The case will play out in its own time. Meanwhile, the delinquent debt service continues to build.
 
Did AR sell gear with internet vendors or did it rely on audio stores only? If the answers are no and yes respectively, that may be the main cause.

Other reasons may be competition for a very limited clientele, limited dealarship exposure, pricing, reliability issues, etc.
I have not read through thread since I posted the above. Anyone know WHY or maybe it does not matter. I would think forum members would want to know. Could be the canary in the Hi End audio coal mine. Oh well.
 
You can get the I/50 on line.
 
If we just stick to the written script, this what we know.
Trent encumbered ARC and himself. He was unable to extricate either ARC or himself. ARC was put in the hands of Lighthouse.
ARC tried to remove itself from this status, but failed. The order signed by the judge on 5/22 firmly establishes that ARC cannot dispose of ANYTHING without Lighthouse as the initiator and controller. ARC must honor this and act in good faith. The purpose of Lighthouse is to assure that maximum value is obtained for the creditors. It is not to assure that ARC survives.
Trent’s case is separate. TWS is not in the hands of Lighthouse. He has admitted that the debts are legitimate and his hearings are separate from the ARC hearings.
In parallel with this we have Michael Fremmer facilitating two press releases which seem to be coordinated by Mr. Cora. Sadly, these press releases have no legal standing. It may be that they come true eventually, but they are not true today. There is no new ARC. The old ARC is being held by Lighthouse. If ARC hinders Lighthouse in any way (by selling, disposing or hiding assets), they are in violation of the judge’s orders.
Both Trent and ARC are in this as self represented… no lawyer is named for either. This is a lesson to those that hate hiring a lawyer. It is suicide to let your financial position degenerate to the point where you do not have the resources to pay a lawyer to protect you.

I am not a lawyer. I don’t play a lawyer on TV. I did not stay at a Holiday Inn Express last night. But I can tell you this. Navigating this morass without a good lawyer who can go nose to nose with Lighthouse is not going to be pretty.

I am VERY hopeful of a good outcome. But if there is one in the queue right now, you’ll need the foresight of a Tolkienien Elf to see it beyond the horizon.

I knew that the Lighthouse management would not be dissolved unless the creditors had been paid. When the “case closed” was posted with no other paperwork, I wrongly jumped to the conclusion (based on the Fremmer published press releases) that Mr. Cora had paid the creditors as part of his purchase deal. The Orders did not bear out my optimism.

If the Fremmer press releases had any purpose, it wasn’t to sway the court. It was to reduce the chatter.

As I noted before, aside from the legal record, all the other info surrounding this case is speculative gossip. The case will play out in its own time. Meanwhile, the delinquent debt service continues to build.

A few observations:

1. It's spelled "Fremer." Honest mistake.
2. Val did not assume any debts. He purchased assets.
3. Val has several good lawyers working on it.

I believe we will learn more details once Val is comfortable that the deal is far enough along. I know there is an upcoming court date in early June, the 7th maybe?

Meanwhile, ARC continues to operate mostly business as usual.
 
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Not a lawyer, but based upon the three points @Nathanu made it looks like ARC owed the bank money, the bank agreed to the sale assuming it would cover the money owed to the bank, but the sale did not in fact generate enough to cover the debt to the bank, so now the bank is suing the new owner (Trent Suggs) for the money owed to it.
Thank you, that is pretty clear. I still have my fingers crossed for a happy outcome that keeps ARC up and running for a long time into the future.
 
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A few observations:

1. It's spelled "Fremer." Honest mistake.
2. Val did not assume any debts. He purchased assets.
3. Val has several good lawyers working on it.

I believe we will learn more details once Val is comfortable that the deal is far enough along. I know there is an upcoming court date in early June, the 7th maybe?

Meanwhile, ARC continues to operate mostly business as usual.
Duly noted. How is it phonetically pronounced?

Regarding Mr. Cora’s lawyers, he is wise to have them.

ARC needs to have some too. We look to Mr. Cora as a saving party, but a true negotiation of the purchase of something with the value of ARC would also involve lawyers representing ARC.
Up until about 20 years ago I had the belief that a smart person could work the legal system based on reading comprehension skills and logic. Then I had the chance to watch masters at work. I’ve never been without one in a major negotiation since.

Regarding what Mr. Cora is purchasing, Lighthouse is driving. There was no one at ARC who had any authority to work a deal independent of Lighthouse. And without covering the debt holders, Lighthouse is not going away.
 
I started out thinking negotiation was about pressing your advantages. I later learned it was about pressing GG your opponents weakness.
Sadly,it may be ARC has no cards.
 
Up until about 20 years ago I had the belief that a smart person could work the legal system based on reading comprehension skills and logic.
Based on my admittedly few interactions with the legal system, the chance of this happening is exactly 0% (as it sounds like you have found out).
 
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A good approach to the legal system is to come to the logical conclusion. Then do the opposite. ;) For example, Do you have to continue to pay rent if your apartment burns down during the lease period?
 
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I started out thinking negotiation was about pressing your advantages. I later learned it was about pressing GG your opponents weakness.
There is much truth here. But it does depend on the sympathies and leanings of the judge.
The lawyer’s relationship with the judge (and/or the clerks) based on prior engagements can be important too.
 
...IMO judges play a much larger role than laypeople commonly think (I am not a lawyer). I discovered my vote for judge is more important than many of the other city and county elected offices. You wouldn't think so, but there are some pretty dopey judges out there. Fascinating stuff, actually.
 
You know how to get rid of an incompetent law prtner? Ssubmit has name for a judicial nomination.
 
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I can't take responsibility for this as it was shared with me by a Lawyer.

What is the difference between a lawyer and a catfish. One is a bottom dwelling, mud sucking scavenger and the other is a fish
 
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A lawyer is only is good as his client. Whenever I took a case, if I won one person would hate. If I lost two people would hate. After I submitted my everybody hated me. ;)
 

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