Intrust Bank files for foreclosure on Big Dog property
10/30/2013 3:20 PM
10/30/2013 3:21 PM
The hammer appears to be coming down on Sheldon Coleman Jr. and the remnants of his once-bustling Big Dog Motorcycles operation.
Intrust Bank filed suit this month seeking to foreclose on Coleman and several of his corporate entities, saying in the suit that it is owed nearly $20 million on six different loans.
The bank seeks to foreclose on the bulk of the former Big Dog Motorcycles property at the northwest corner of Douglas and Hydraulic.
Big Dog Motorcycles shut down as a new motorcycle manufacturing business in April 2011 after five years of declining sales. Coleman restarted a much smaller business, BDM Performance Products, in one of the warehouses on the site.
One of the provisions that Coleman negotiated with Intrust was to hold off on foreclosing on the property for two years so he could try to sell it.
On Tuesday afternoon, the dozen or so BDM employees met in a company meeting. A company manager referred all questions to Kathy Huhman, an official with Sheldon Coleman Enterprises. Huhman did not return messages seeking comment Tuesday or Wednesday.
Attorney Timothy Finnerty, who represents Coleman, and attorney Ed Nazar, who represents Intrust Bank, also did not return calls for comment on Tuesday afternoon or Wednesday.
Val Iverson, who earlier this month signed a lease with one of Coleman’s entities, Waterview Realty, to put a trampoline business in one of the buildings on the site, said he hadn’t heard anything about the foreclosure filing. But he said he wasn’t worried.
“I have a lease,” he said. “I’m coming to town. I’m happy to deal with the bank or whoever.”
In the suit, Intrust names as defendants Sheldon Coleman, individually; the Sheldon Coleman Living Trust; Waterview Holdings; Waterview Realty; CD Investment Partnership; Big Dog Motorcycles; Motorcycle Enterprises; BDM SC: and Wichita Motorcycles.
According to the suit, Coleman signed four different notes in 2011 for a total of $4.7 million. In the loan agreements, he pledged as collateral almost all of the Big Dog site and the company’s equipment and inventory, including the last seven Big Dog motorcycles, important in the company’s history, that stood for years in the company’s showroom window.
Coleman had also signed a $16 million note in 2009, of which he owed $14 million as of October 2013, and a 2012 note for $1.2 million, according to the court documents. Those loans are secured by the Big Dog property, as well as a stream of monthly distributions from his investment company, and his life insurance policies. These notes are in default because the Big Dog property is the subject of foreclosure, the lawsuit claims.
Coleman was the third generation to run his family’s namesake company, the Coleman Co. In the late 1980s, as company CEO and chairman, Coleman led the effort to take Coleman Co. private, but was outbid by Wall Street buyout specialist Ron Perelman on the 73 percent of the company not owned by the family.
The Coleman family was richly rewarded in the 1989 buyout. In 1994, Coleman started selling customized Harley-Davidson motorcycles he built in his garage and within a year began producing a radical, high-dollar heavy cruiser.
The company saw annual growth as high as 80 percent. In 2005, at the height of its popularity, the company had more than 300 workers and more than $120 million in revenue. That year, Coleman bought 106 acres on Greenwich Road for a future plant.
But his success was built on easy credit and the housing bubble. His biggest buyers were small housing contractors who flourished in California, Nevada and Florida. Because of the easy financing, people could spend $30,000 to $40,000 for the gleaming, stylish, powerful V-twin rockets made by Big Dog.
As the housing bubble deflated starting in 2006, Big Dog sales first slipped and then plummeted. The first layoffs came in early 2007 and Coleman borrowed to keep the operation running. Later he tried to keep the company going while he sought a buyer. He borrowed in 2011, about the time he closed down production, to finance his new business and to hold onto the site.
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