FACED WITH mounting debts on a loan from JPMorgan Chase bank, Texas-based LS Motorsports, the distributor for Diamo brand scooters, motorcycles and ATVs, Fischer motorcycles and Italjet vehicles, has liquidated all of its assets at auction.
As a result of the liquidation, another company has agreed to distribute the Diamo brand to ensure that dealers continue to receive support, says Mathu Solo, LS Motorsports president.
The new owner of the Diamo brand is Precision Powersports, which will now serve as distributor of the scooter, motorcycle and ATV lineup. Precision Powersports is part of the Precision Group of Companies and is owned by Jeff Steinkirchner and Larry Cekella.
Scooter industry veteran Joel Martin and his company, Martin Racing Performance (MRP) purchased the bulk of the Diamo from the LS Motorsports auction. In a press release Martin said that the company does not sell retail and wants to work with dealers to help service customers in need of parts.
"I have had a lot of Diamo dealers contact us that could not meet our minimum [orders] because they are smaller stores, so we will work with those stores," Martin explained in the release. "We want the dealers to know we are here to help and have lowered our dealer minimums."
Solo, who, along with his brother founded the company in 2003, says that he will continue to act as the distributor for Fischer motorcycles and for the Italjet brand.
LS Motorsports and Solo were notified in late in 2008 that the company was in default on a small business loan it had received in 2006. On Feb. 2, 2009, the bank filed suit against the company saying it owed more than $1.2 million.
In an e-mail to Dealernews, Solo says the chain of events started when the company received notice that Chase was not renewing its credit line and demanded payment for debts owed. "LS Motorsports was facing the same challenges as many companies in our industry and was not able to secure financing during the recent economic crisis and was unable to meet the demands of their creditors," Solo wrote. "As a result the assets of LS Motorsports has been liquidated at auction." (continued)