I've always been impressed with Cervelo as a company. They seem to have top notch products, sponsor an pro cycling team and evidently have a good reputation. However, the following article leaves me completely surprised as it seems out of character. If anyone can shed some light on this, please add your comments...
Jeff Adams here - I'm posting under a different user name because of the events of the last couple of months.
A lot of people have been wondering what is happening at Marvel.
Christian and I are sad to report that we have lost the company in a hostile takeover by Cervelo Cycles Inc., the bicycle company that we partnered with. Christian and I are pretty gutted. We kind of feel like our baby was legally kidnapped.
Rogue Wheels Inc., and the Marvel Wheelchairs brand was owned by Christian and I, and Phil White and Gerard Vroomen of Cervelo – we each owned 25%.
On March 8th, Phil White of Cervelo called a board meeting, in which they told us that Cervelo wanted to “enforce their security”, meaning that they wanted Christian and I to pay them back all of their loan by the 19th of March, 2010. (It was originally scheduled to be paid back in 2014, but the agreement had a clause that said that they were allowed to demand it back at any time)
At that meeting, Phil offered us a new deal – he wanted us to reduce our ownership from 25% each to 2.5% each, and told us that he expected us to work for free for the company for six months. At the end of the six months, he would decide whether or not he would pay us.
His lawyer, Laughlan Campbell, who was at that meeting, told us that he intended to “scrub and flip” the company at the end of the six months for “tens of millions of dollars”.
Christian and I left the meeting (and to our credit, we didn’t smash a single thing on the way out).
On March 19th, Cervelo put Marvel into “Receivership”, which is the Canadian version of Chapter 7 bankruptcy, telling the Court that we were insolvent because we weren’t able to pay them back their loan. They then purchased the company back from the Receiver by making what’s known as a “debt offer” – buying the company back by offsetting their offer against what they were owed in the loan, but extinguishing any ownership that Christian or I had in the process. We tried to purchase the company back from the Receiver, but our offer (of cash) was rejected in favour of the offer by Cervelo.
The rest of the message can be found at the link above. Obviously this is one side of the story. I'd be real curious to hear what the other side of the story looks like.