Whatever happened to Eller Industries and
Indian Motorcycle?

 

The Documents:

Letter to the Estate | American Iron Article | Valuation Brief | Easy Rider Article

Request for Judges' Recusal | Response to Notice of Disapproval

 

The documents referenced above and below are posted because of the pathological lies and distortions contained within the documents that have been filed with the Federal District Court and posted, and reposted. on-line by the Receiver in this matter, Richard Block, and his company, Sterling Consulting. These distortions and lies about Leonard S. Labriola must be answered lest they be allowed to damage the reputation he has sacrificed and worked very hard to maintain and protect.

Eller Industries, Inc, the company founded by Leonard S. Labriola, was powerless in its fight against the corruption of this Federal Court to protect the tremendous value created by Leonard S. Labriola for both his shareholders and for the estate that owned the rights to the Indian Motorcycle trademark.

The fight was very simple – the parties led by Eller Industries were fighting to have an open and honest evidentiary hearing to determine which of two bids competing for the Indian Motorcycle Trademarks offered the greatest value to the members of the Indian Motorcycle estate.

In an open and honest forum this would be very simple as experienced professionals make these kinds of evaluations every day. However, when the officer of the court controlling the assets owned by the estate is being paid $20,000 per month by the company with the vastly inferior bid, as he was in this case, it is anything but simple.

One of these two companies was Eller Industries, Inc., a company founded by Leonard S. Labriola. For the interesting backstory you can read the Easy Rider article, "Mile High Mutiny" which is also attached.

The receiver cancelled Eller's contract and was opposing their bid. Eller was a public company whose contract with the estate included, in addition to $20 million in cash, 9 million shares of stock which constituted 40% (forty percent) of all issued and outstanding shares of the company. On the day the Receiver cancelled the contract, these shares were trading on the open public market for $4.00 per share. This made the value of the cancelled Eller contract at least $56 million.

Eller's bid was presented together with Eller's business plan, Eller's spectacular management team, and Eller's Indian Motorcycle that was being developed and engineered by a team of top designers and engineers at Roush Engineering. This combined package had received accolades in publications ranging from Wall Street Journal to Cycle World to American Iron – whose article is also posted here.

At the actual hearing, Eller was supported by the Cow Creek Band of the Umpqua Tribe of Indians who had invested millions of dollars into Eller's motorcycle development project and who was going to build the manufacturing facilities on their
tribal lands in Oregon; Companies with millions of dollars invested into Indian Motorcycle brand licenses which would either benefit from or be hurt by the eventual trademark owner, and most significantly, hundreds of individuals and businesses that together constituted approximately 80% of the receiver's entire estate, the estate the receiver was charged with the responsibility to protect.

In support of the IMCOA bid was the receiver, his attorney, and officers of IMCOA only. The IMCOA bid offered an equal cash component, but offered only 4% (four percent) of the outstanding shares of the company.

Remember, Eller's offer included 10x that value - 40% of all outstanding shares which meant 40% of all future earnings the company would ever generate as well as 40% of the eventual value of the Indian Motorcycle Company at a time when the Harley Davidson brand was worth many billions of dollars.

Most damaging of all, was that the 4% offer was for 4% of a company whose business model was mocked as a joke and insult by most of the motorcycle industry analysts and press, analysts and press that proved prophetic as the company went bankrupt a few short years later.

At the time of IMCOA's bankruptcy the Receiver went back to his estate members and, by the power of the Federal Court, forced them to pay back to the Receiver a significant percentage of the cash portion of the bid they had received years earlier.

Think about this - the receiver, who was charged with the responsibility of protecting the estate, had cancelled the Eller Contract – read the docs to find out how – while accepting a $20,000 per month consulting contract from IMCOA.

So as a $20,000 per month paid consultant for IMCOA, he was opposing the wishes of his own estate to award the contract to IMCOA. Judge Zita Weinshienk and O. Henry Schlatter saw no problem there and, while refusing multiple requests of her own estate to have an objective third party evaluate the two offers, assigned the contract to IMCOA.

A brief evaluation of the value of the two bids is also posted.

Unsuccessful in his direct effort to have an open, evidentiary hearing, Leonard S. Labriola tried a different tactic. The receiver offered him $90,000 if he would sign a "gag order" and commit to never discuss the details of the events that had transpired. Instead, he filed the documents attached to this website with that same court.

 

The Documents:

Letter to the Estate | American Iron Article | Valuation Brief | Easy Rider Article

Request for Judges' Recusal | Response to Notice of Disapproval