FUELL Inc., the electric bicycle and e-motorcycle startup built largely on the name of the legendary motorcycle visionary Erik Buell, has entered into chapter 7 bankruptcy proceedings.
For some time now, I’ve been attempting to chase down answers from the electric bicycle maker FUELL regarding the company’s failure to deliver on its popular Flluid-2 and Flluid-3 e-bike launch and the company’s seemingly incommunicado status. After wading through bounced-back emails from apparently terminated marketing staff, I finally got an answer in the form of a reply to a direct inquiry to the company’s CEO, Francois-Xavier Terny.
However, that reply didn’t come from Terny himself, but rather the lawyer who I learned is now representing FUELL in its new bankruptcy proceedings, which were filed yesterday.
Below is the text of the letter I received.
October 17, 2024
To the creditors of Fuell Inc,
I am currently representing Fuell Inc. in a chapter 7 bankruptcy proceeding filed in the U.S. Bankruptcy Court for the Eastern District of Wisconsin on October 16, 2024 as case #24-25492. A trustee has been appointed to liquidate the assets of the Company. All creditors will be advised to file claims in that proceeding as it appears that there may be assets for payment of unsecured claims after all of the secured claims are paid or otherwise dealt with. A copy of the Notice of the Case is posted nearby.
Management regrets the Company has been forced to take this path. Unfortunately, the Company lacks funds to pay for the labor costs and other required services necessary to assemble and ship products to its customers, and additional funds could not be raised to pay the Company’s outstanding current liabilities or to pay for the assembly and shipment of pre-ordered electric bicycles. I hasten to add that the Company has on hand what it believes to be the parts necessary for the assembly of the bulk of, if not all of the pre-ordered electric bicycles.
After consultation, management has determined that a promptly filed chapter 7 was the best way to provide value for the significant assets held by the Company including, but not limited to, a purchase from the bankruptcy trustee of substantially all of the assets of Fuell Inc. by an interested party who may subsequently, with effort and negotiations, potentially restart the operations and move forward. Obviously, this is the route preferred by management, but it is complicated and fraught with risk. Any creditor or interested party that has such an interest should be contemplating retaining experienced bankruptcy counsel to negotiate with the Trustee for such a purchase.
As the Company has little to no funds, and no employees, it is unable to directly answer creditors’ questions concerning specific orders. Creditors may direct questions to the Trustee who will be apprised of the situation. Since there are no employees at the Company to respond to questions at this time, current inquiries to the company will go unanswered.
All known creditors will receive the notice of the bankruptcy filing and advised to file claims. If you have placed a deposit for the purchase of a product, your claim may be entitled to priority to an extent. You may want to consult with a lawyer on this issue.
Great effort is being made to provide enough information in the bankruptcy schedules so that there is at least a possibility that a potential purchaser of the assets may be able to restart the Company or otherwise redeploy the assets to produce the product intended. Current equity will lose everything that is been invested in the company through this chapter 7 bankruptcy filing.
We trust that this information may be of some cold comfort to you as a creditor of the Company and will certainly give you an idea of what you can expect in the immediate future. As indicated above, you will be notified of the bankruptcy filing as a creditor or other interested party.
If you have an interest in purchasing the assets through the bankruptcy process or know of anyone who may have such an interest, you may contact the Trustee or the undersigned to discuss potential avenues to accomplish that.
Sincerely,
PAULG. SWANSON
Attorney at Law
The deadline for claims to be submitted has been set for December 26, 2024, as described in a notice that accompanied the above letter from Fuell’s lawyer.
Chapter 7 bankruptcy is a legal process in the United States that allows individuals or businesses to eliminate most of their unsecured debts by liquidating non-exempt assets. A court-appointed trustee oversees the sale of these assets, and the proceeds are used to pay off creditors. It’s often referred to as “liquidation bankruptcy” because assets are sold off to settle debts.
In this case, the trustee for FUELL’s bankruptcy is Titania D. Whitten of Whitten Law Offices in Wauwatosa, Wisconsin.
FUELL Inc. was founded in 2019 as a novel electric bicycle and motorcycle company, quickly gaining momentum after is unveiling of high-performance, innovative electric bikes designed for urban commuting. Founded by Erik Buell, a legendary figure in the motorcycle industry, FUELL focused on combining sleek design, advanced technology, and sustainability in its electric mobility offerings.
The company’s first electric bicycle model, the Flluid-1, was widely deemed a success, but controversy swirled around FUELL’s Flluid-2 and Flluid-3 models, which raised over US $1.5M in crowdfunding through an Indiegogo campaign but failed to deliver at scale.
Not long after the campaign ended, I had the chance to test ride one of several early production Flluid-3 electric bikes at Eurobike 2023. At the time, the bike worked quite well and promised a refined commuter experience. However, the company explained that the Valeo internally geared mid-drive motor was a sticking point in production, requiring further custom modifications and slowing down production.
A steady stream of updates slowed to a trickle over the next year and eventually stopped entirely, leading many to worry that the project had been abandoned or that the company was headed for bankruptcy.
Several other high-profile e-bike company bankruptcies added fuel to the fire, with yesterday’s announcement finally bringing closure to the question, though certainly not to the hundreds of customers likely never to receive their FUELL Flluid electric bicycles.
With just over two months left for creditors to make a claim in the bankruptcy filing, hopefully those customers will be able to recover some or all of their money.
