Ultra Motorcycle Company Makes Deal On Lawsuit
26 July 2000
Concludes Settlement On Two NotesMIRA LOMA, Calif. - Bikers Dream Inc., which does business under the name Ultra Motorcycle Company , today reported:
The Company announced in its Annual Report on Form 10-KSB for the year ended December 31, 1999, that a judgment had been entered against it in the case of James Kinnicutt, et al vs. Bikers Dream, et al., Sacramento Superior Court, Case No. 98AS04185, for the sum of $683,601. In response to a subsequent post-trial motion by the plaintiffs, the court awarded them an additional $154,000, as and for attorney's fees, thereby bringing the total award against the Company to $837,601. The Company has recently concluded a settlement with the plaintiffs, which provides for a compromise (reduced) payment to the plaintiffs and the mutual release of all claims and dismissal of the action, with prejudice.
A summary of the settlement, which will be discussed in more detail in the Company's 10-QSB for the second quarter ending June 30, 2000, provides that the plaintiffs shall be paid the sum of $190,000 and that the balance owing on the plaintiffs' SBA loan, which was the subject of the litigation, shall be paid in full. The Company's insurer is paying the entire settlement, except that the Company shall repay to its insurer the loan pay-off of approximately $67,000, payable, without interest, at the rate of $2,000 per month. The Company has never denied its responsibility to pay the SBA loan. Settlement documents have been signed by all parties, which include a motion to vacate the judgment and a request for dismissal of the action.
An ancillary agreement was also entered into between the Company and its insurer, which provided, among other things, that the Company would release its insurer from any and all claims, relative to the handling and defense of the action, in consideration for the insurer's payment of the settlement amount.
On July 14, 2000, the Company announced the settlement of its obligations owing on two promissory notes held by w3 Holdings Inc. The combined sum of principal and interest owing on the notes was approximately $560,000, at the time the settlement was reached. The Company was able to negotiate a compromise payment of $195,000, to extinguish these debts. Final payment of the $195,000 was made on July 20, 2000.
Harold Collins, the Company's chief operating officer, stated, "As a result of these two settlements, the Company was able to avoid over $1.1 million in liabilities."
Ultra Motorcycle Company is a manufacturer and distributor of quality-built American heavyweight cruiser motorcycles. Corporate headquarters and manufacturing operations are located in Mira Loma, Calif.