Saratoga Frameworks has shut down. Last week, Brian Case, the owner of Saratoga, informed the remaining eight employees the factory was shutting down and they were to remove their personal possessions. The factory that produced thousands of Serotta bicycles is now shuttered. So ends one of preeminent frame building enterprises the world has known.
Of course, that’s not all there is to this story. While any cyclist might think that a world without new Serottas is as surreal as having the apes take over, this tale gets weirder.
At the end of January the assets of Mad Fiber went on the auction block. Anyone who rode those wheels spoke of them in the same reverential tones people reserved for Serotta. As a result, there was a good deal of interest in what used to be that operation. It was just revealed that ex-T-Mobile team owner Bob Stapleton bought the intellectual property for Mad Fiber. He’s revealed only that he’s at the “talking-to-smart people stage.” He considers the existing technology as a start point.
While SRAM’s Scott King bid $5000 for the patents and other intellectual property, Stapleton won the auction, claiming the goods for $31,000. John Reichstein, bidding on behalf of a company called Econ won the auction for Mad Fiber’s tooling and non-IP assets. He bid $7000. Econ Equipment Solutions is a Washington-state-based company that is best known as an equipment provider for paint and finish work for everything from large vehicles to aerospace. For a company that once claimed assets of $1.21 million (and $1.65 million in liabilities), $38,000 is a paltry remittance.
Divine Cycling Group’s other entity, Blue Competition Cycles, is busy writing the most interesting footnote to this story. Blue’s overseas factory formed an LLC in the U.S., called Minds Group, and re-hired Steven Harad as CEO. Harad’s first move was to bring back Daniel Stallings, Blue’s once and future sales manager. He also changed the brand’s name to Blue Bicycles to broaden its appeal.
When I contacted Harad, he said, “We are excited about the future, bikes have arrived, dealers are opening their doors to Blue Bicycles and 2014 is looking strong.” Blue will be at Interbike this year. It’s on.
He has every right to be optmistic, as do the company’s owners. It’s an odd state of affairs, though. Of the three brands, the one most likely to slip under the waves, never to return, seemed to be Blue. Surely someone would save Serotta or Mad Fiber, right?
In talking to any number of people as I’ve chased this story for the last eight months or so, two names come to the fore in every conversation—Bill Overbay and Brian Case. Both have been accused, off the record, as being the reason these companies went under. Some point the finger more at Overbay, while others point the finger more at Case; perspective tends to depend on whether the person’s relationship was closer to Blue, Mad Fiber or Serotta. Everyone has an opinion and all the opinions are strong and no one is willing to go on record.
You wouldn’t want to be called the names I’ve heard used in conjunction with Case and Overbay, though I will say the worst vitriol does seem to be reserved for Case. Snake-oil salesman is perhaps the kindest thing he was called. Everyone I talked to described the tactics he used to stall people on payments for services rendered and everyone was universally concerned that going on the record would only create greater headaches for them in trying to get paid.
Meanwhile, Bill Watkins, Serotta’s former CEO has challenged the bankruptcy filing by Case on behalf of DCG back in December. The bankruptcy filing for Divine includes no Serotta assets. None at all. Case claimed that he didn’t know the disposition of the Serotta IP when last we spoke. Someone has to know who owns the Serotta IP and whether or not Case owns it himself, I’m convinced he knows who does and was lying to me when he said he didn’t. While we were never that tight, I go back more than 20 years with Case and I’m disappointed he would insult me with such a dance.
Watkins and Serotta haven’t been laurel-sitting, either. Serotta is consulting with Alchemy Bicycle while Watkins has been assisting Catrike, a maker of recumbent tricycles. The duo is also aligned with Gluskin Townley Group, an industry research firm.
Several people I’ve spoken to have observed that they suspected Case of being more interested in short-term profits at the outset. If they were right on that score, then it would fit that his strategy might have been (as two people suggested to me) to wind the company down, sell the equipment, then sell the real estate.
The last time RKP reported on an industry squabble, Fuji Bikes‘ owner, ASI, wrote the epilogue. ASI swooped in and embarrassed Specialized by reminding the world that they owned the trademark for Roubaix. It was a forehead slapper.
Guess what? ASI owns a trademark for the name Saratoga in the bike industry. Srsly. They have produced a bicycle by that name for nearly 30 years; back in the ’80s it was a road bike, but these days it’s a cruiser.
Folks, you can’t make this stuff up.
Any effort by Case to try to sell any intellectual property connected to Saratoga Frameworks will have to overcome ASI’s objections. And they will object; an effort to reach a settlement deal with Case last fall was never completed; given what everyone tells me about how he does business, this isn’t remotely surprising.
The closest thing we can offer to ending this post on a good note is the news that the Canadian Bike Brand No. 22 has hired four of the former Serotta/Saratoga employees. Apparently, the young company (launched in 2012) plans to open a production facility in New York state. The four employees are Scott Hock, head welder Frank Cenchitz, welder Caleb Sesselman and Bill McDonald for finishing and paint. No. 22 offers road and track bikes made from titanium, which would be why you don’t see the names of any brazers mentioned.
Such an announcement should have a powerful effect on the regard for the quality of bikes from No. 22.
When I think of the number of people who have had to file for unemployment, the number of people who lost dream jobs, I want to weep. What’s especially disquieting about this is how three people have said to me, ‘Patrick, you have to warn the industry not to do business with these guys.’
At the end of the Ridley Scott film “Prometheus” the character Elisabeth Shaw, played by Noomi Rapace, says in the film’s closing shot, “Final report of the vessel Prometheus. The ship and her entire crew are gone. If you’re receiving this transmission, make no attempt to come to its point of origin. There is only death here now, and I’m leaving it behind. It is New Year’s Day, the year of our Lord, 2094. My name is Elisabeth Shaw, last survivor of the Prometheus. And I am still searching.”
It’s like that.
Image: Twentieth Century Fox