Smart Parts files for chapter 7 bankruptcy

[WUNDERWAFFEN]

Wow everybody forgets that Smart Parts invented the $100 barrel way back when. Logically it was at least twice as good as the $50 competition.

[druid]

Prediction: KEE buys up all necessary patents for the Impulse and manufactures them with the Luxe. The Luxe will be the last remnant of the Shocker. DLX also buys the patents for the Freak Barrel. GI Milsim runs away with the Ion.

fixed for the more rich of the two companies

[MedicDVG]

It wouldn't surprise me if the Gardner's (or their proxy) ends up buying the patents from the bank at fire sale prices.

I have said it before -- love them or hate them, the Gardner's are anything but stupid. They will manage to leech back out of the slime and will be making money (well for themselves if not any particular company) -- which they have been very good at. I would suspect that the patents themselves will be the engine for that money stream. I mean what better option -- go to chapter 7 liquidation, be the first in line to purchase the assets through a NEW and improved company they control that is not associated with SP (*cough* GI Milsim) and presto, the gravy train continues. The only thing we can hope for is that there is a well funded competitor who gets into a bidding war for the patents and drives the price up so high that the Gardner's can't control them anymore.

Which in itself is kinda a 3 headed hydra type of situation as whomever can buy them from under SP/Gardner's will also need to defend and enforce the patent and licensing agreements...

Just guess we will have to wait and see.

End result in either case, neither of the brothers will be at the soup line any time soon.

[Hobbez]

Don't be surprised when GI Milsim ends up with all those patentts.

[cockerpunk]

Don't be surprised when GI Milsim ends up with all those patentts.

i also predict that GI Milsim is the lifeboat.

[CatoRockwell]

So we just need to make sure GI Milsim is enough of a dirty word that they go under as well.

[questionful]

I think others have also said something like this. I just want to add my speculation to the thread.

Perhaps SP didn't even need to file bankruptcy, and they're just doing it as a marketing ploy. To get rid of a bad name or something. Perhaps we're all cheering and speculating but completely clueless. Maybe this move by SP is bad for paintball. Who knows. I hope not.

Anyway, while I think it was horrible what SP did with the patents, now I don't care too much because high ROF isn't even that big a deal. People used to play stock class and still have tons of fun.


What I would like to see from AGD is an automag with a body and frame suited for accepting a drum magazine! Instead of changing magazines, you just re-wind the magazine and feed it with an extra large re-loading hopper. I think it would be an improved version of the warp feed.

[Mayvik]

What I would like to see from AGD is an automag with a body and frame suited for accepting a drum magazine! Instead of changing magazines, you just re-wind the magazine and feed it with an extra large re-loading hopper. I think it would be an improved version of the warp feed.

It's called an FN303.

[paullus99]

After reviewing SP's financials, they were in terrible shape - starting in 2009. They made the mistake of taking out some very large bank loans for new equipment and the such (the patents ended up as part of the collateral) at exactly the wrong time.

When the economy went into the can, the bank called in the loans (PNC) and it killed SPs available cash reserves. The Chapter 11 was supposed to give them time to reorganize, but given the weak state of the economy (and the paintball market in general), none of the plans met with PNC's approval.

At this point, a receiver will be appointed, whose job will be to evaluate the remaining company assets vs. the outstanding claims by creditors & try to start paying them off with whatever is available. These are usually fairly thorough processes and are vetted by the Courts, so I doubt the Gardners would be able to pull a fast one and grab the patents without paying a premium - since they'd be up for sale on the open market.

Of course, since the economic still stinks, those patents aren't worth nearly as much as they would be in an up-economy, so we'll see what happens. This isn't a quick process and could drag out for a couple of years, so if the patents do expire soon, they'll get less valuable each day that goes by.

With a Chapter 7 on their records, it will be very difficult for the Gardners to secure additional financing for new projects - banks, especially today, aren't likely to back a loser - and venture capital isn't available in the paintball market, it's too niche without a big upside.

With AKA, I believe the final agreement on E-Markers was with the Gardners & not SP, so that prohibition is still valid (as much as it still sucks).

[questionful]

It's called an FN303.

I forgot about that. I just googled it. It's kinda what I mean, except it only holds 15 rounds. I was thinking something more like 100+.

[Tracy_ptp]

It's called an FN303.

Forest actually designed the original and it was called the UTBPS.

[vf-xx]

It's called an FN303.

MMmmm.... rework the FN303 to use a standard mag valve (not the high velocity version they're running now), and release it as a FS marker...

Drool.

[factoid]

Burn burn!

Finally the beast is slain.

Now, what is going to happen to those patents?

They'll be sold. A competitor will buy them up and continue to milk them for as long as they're worth something.

Smart Parts dissolving really will have little impact on the industry. Their technology will be sold off, their patents will be sold off, their remaining stock will be sold off. Some other manufacturer will make use of the parts and probably even continue some of the smart parts brands, at least the ones that still have value.

The two most likely outcomes are that one company will come in and buy up the majority of Smart Parts' IP (intellectual property) and hang onto it, reusing what they feel is good and hanging onto the rest to keep it away from competitors. The other likely outcome is that they'll be picked apart piece by piece with bits of smart parts tech going in all different directions.

The least likely outcome with a Chapter 7 proceeding is that someone will come in and buy the company whole. That would have happened either before or during chapter 11. Once a company hits Chapter 7 it's usually because there were no buyers at the table and all they have left to do is liquidate assets like patents, brands and inventory.

[factoid]

If I remember correctly, it take an act of congress to renew a patent over 20yrs. Special circumstances which paintball isn't one.

You make a good point. I have no idea what the relevant patents are dated, but considering that the first electro markers started showing up in 1997, and were probably in production and filing patents a couple years before that I'd say the first batch of patents is due to expire in 2015 or so.

That's still worth something considering that the electro market is pretty dominant these days, but given market conditions and the state of innovation in the marketplace I don't see where those 5 years are worth a whole lot to people.

I imagine that if AGD hangs on for 5 more years they'll be free and clear to produce electropneumatics again regardless of how this SP thing shakes out, which is likely to take a year or two anyway.

[cockerpunk]

They'll be sold. A competitor will buy them up and continue to milk them for as long as they're worth something.

Smart Parts dissolving really will have little impact on the industry. Their technology will be sold off, their patents will be sold off, their remaining stock will be sold off. Some other manufacturer will make use of the parts and probably even continue some of the smart parts brands, at least the ones that still have value.

The two most likely outcomes are that one company will come in and buy up the majority of Smart Parts' IP (intellectual property) and hang onto it, reusing what they feel is good and hanging onto the rest to keep it away from competitors. The other likely outcome is that they'll be picked apart piece by piece with bits of smart parts tech going in all different directions.

The least likely outcome with a Chapter 7 proceeding is that someone will come in and buy the company whole. That would have happened either before or during chapter 11. Once a company hits Chapter 7 it's usually because there were no buyers at the table and all they have left to do is liquidate assets like patents, brands and inventory.

GI Milsim with buy up the guns and the patents if they can.