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Meade files for Bankruptcy after losing antitrust case

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#26 n2dpsky

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Posted 09 December 2019 - 01:06 PM

I nearly wrote the same thing. Meade was 7 years old at the time and mostly reselling items they sourced in Japan. They were certainly not a big player yet.

#27 Chris Lord

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Posted 09 December 2019 - 02:45 PM

Rob, it wouldn't be appropriate to discuss it on CN. E-mail me lordcjr@gmail.com & we can discuss it in private.
Leo Henzl was a Celestron sales rep back in the day. He knew Johnson & Deibel personally. And he knew where the skeletons were hidden. Not the history folk think they know.

#28 jgroub

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Posted 09 December 2019 - 05:11 PM

Wish I knew this before I purchased a LX 90 which is now back at Meade for repair.

 

Below is a email I just received from them.

I find it unacceptable to wait 2 months for a repair..and they are shipping it to Mexico for repair? No techs in CA I guess.

Will also post this as a separate topic; more of a warning to anyone who is considering a Meade.

T

Yes, I find it unacceptable too, especially when Celestron's own warranty says that they will get fix it within 30 days.  

 

I've returned stuff to Celestron; I've returned stuff to Orion.  In both cases, they took over 60 days.  (Around 65 for Celestron; around 75 for Orion.)  If you know that going in, before you send your stuff in for repairs, you can manage your expectations accordingly.  



#29 Upstate New Yorker

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Posted 14 December 2019 - 02:15 PM

The problem for Meade is the triple damage penalty contained in the settlement favoring Orion.  This means that proven damages of $16.8 million to Orion result in a penalty of $50.4 million for Meade.  Section 4 of the Clayton Antitrust Act of 1914 specifies this triple damage penalty, and it provides an incentive for private parties such as Orion to prosecute these cases, and thus it puts real teeth in the antitrust laws of the United States.  You'll notice that Meade, in declaring bankruptcy, specifies debts of $10 to $50 million.  More than 100% of this is due to losing the suit brought by Orion.  Losing the suit was the kicker that did in Meade in its current configuration.

 

From Jingbo Sunny's perspective, the legal settlement made Meade a hot potato for it, so now Jingbo Sunny wants to divest Meade.  Jingbo Sunny calls the shots; Meade is its subsidiary.

 

I would like to take a moment to defend Meade's products.  I own a new Series 6000 80 mm APO refractor that is optically and mechanically superb, and very portable as well.  Meade's ACF telescopes are getting rave reviews in the magazines, and small colleges and observatories tend to select the ACF, as has for example, Lowell Observatory.  The LX600 and LX850 models with StarLock are praised for their ability to accurately find deep sky objects.  True, sometimes nylon gears are used in the ETX series when they should not be used at all--charge me a few more bucks to cover the added cost.  Also true: some models are too massive for one person and for every day use.  And finally, be more innovative.  For example, consider a modified Cassegrain design with an open tube. Etc.

 

But overall, Meade has some very good products with innovative designs to them.  Putting all this together, I predict that Meade will be purchased by private equity and that the name will continue.  For myself, I only wish there were no nylon gears, and that Meade would work on weight reduction in their high end products.  The thought of owning a 12" LX600 has intrigued me for years.  It is only ruled out by where I live.     


Edited by Upstate New Yorker, 15 December 2019 - 07:06 AM.


#30 jgroub

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Posted 14 December 2019 - 02:26 PM

The problem for Meade is the triple damage penalty contained in the settlement favoring Orion.  This means that proven damages of $16.8 million to Orion result in a penalty of $50.4 million for Meade.  Section 4 of the Clayton Antitrust Act of 1914 specifies this triple damage penalty, and it provides an incentive for private parties such as Orion to prosecute these cases, and thus it puts real teeth in the antitrust laws of the United States.  You'll notice that Meade, in declaring bankruptcy, specifies debts of $10 to $50 million.  More than 100% of this is due to losing the suit brought by Orion.  Losing the suit was the kicker that did in Meade in its current configuration.

 

From Jingbo Sunny's perspective, the legal settlement made Orion a hot potato, so it now wants to divest Meade.  Jingbo Sunny calls the shots; Meade is its subsidiary.

 

I would like to take a moment to defend Meade's products.  I own a new Series 6000 80 mm APO refractor that is optically and mechanically superb, and very portable as well.  Meade's ACF telescopes are getting rave reviews in the magazines, and small colleges and observatories tend to select the ACF, as has for example, Lowell Observatory.  The LX600 and LX850 models with StarLock are praised for their ability to accurately find deep sky objects.  True, sometimes nylon gears are used in the ETX series when they should not be used at all--charge me a few more bucks to cover the added cost.  Also true: some models are too massive for one person and for every day use.  And finally, be more innovative.  For example, consider a modified Cassegrain design with an open tube. Etc.

 

But overall, Meade has some very good products with innovative designs to them.  Putting all this together, I predict that Meade will be purchased by private equity and that the name will continue.  For myself, I only wish there were no nylon gears, and that Meade would work on weight reduction in their high end products.  The thought of owning a 12" LX600 has intrigued me for years.  It is only ruled out by where I live.     

Two things about that.  One is that this case was not decided on the federal anti-trust laws.  Yes, Orion put them in the pleadings, but as I read the court filings, the court decided that the federal statutes did not apply.  Fortunately for Orion, this did not leave them SOL.  There was a California anti-trust law that they also brought the case under, and the case was decided on that basis.  The California statute also had mandatory punitive damages as well.  

 

HOWEVER, even with that, there is a question about that judgment, and whether it exists or not.  Somewhere in one of these "Meade is bankrupt" threads, another poster (who seems to have a lot more knowledge about bankruptcy than I do), said that although the jury found for Orion and awarded them the treble damages as the California law requires, the judge had not yet entered that judgment when Meade declared bankruptcy.  This may seem like splitting hairs, but it is a lot more than a legal nicety.  Because the judge didn't enter the verdict as a judgment against Meade/Sunny, Orion's GOT NOTHING to enforce.  And because Meade/Sunny have declared bankruptcy, the judge CAN'T enter the judgment now, either.  

 

Didja ever see the movie (or read the book) The Rainmaker, by John Grisham? 

 

Spoiler alert - what happened here happened there, too. And the "winning" parties are left holding nothing but their @!(# in their hands, with nothing to collect.  Ahem.  lol.gif


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#31 Upstate New Yorker

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Posted 14 December 2019 - 04:13 PM

Two things about that.  One is that this case was not decided on the federal anti-trust laws.  Yes, Orion put them in the pleadings, but as I read the court filings, the court decided that the federal statutes did not apply.  Fortunately for Orion, this did not leave them SOL.  There was a California anti-trust law that they also brought the case under, and the case was decided on that basis.  The California statute also had mandatory punitive damages as well.  

 

HOWEVER, even with that, there is a question about that judgment, and whether it exists or not.  Somewhere in one of these "Meade is bankrupt" threads, another poster (who seems to have a lot more knowledge about bankruptcy than I do), said that although the jury found for Orion and awarded them the treble damages as the California law requires, the judge had not yet entered that judgment when Meade declared bankruptcy.  This may seem like splitting hairs, but it is a lot more than a legal nicety.  Because the judge didn't enter the verdict as a judgment against Meade/Sunny, Orion's GOT NOTHING to enforce.  And because Meade/Sunny have declared bankruptcy, the judge CAN'T enter the judgment now, either.  

 

Didja ever see the movie (or read the book) The Rainmaker, by John Grisham? 

 

Spoiler alert - what happened here happened there, too. And the "winning" parties are left holding nothing but their @!(# in their hands, with nothing to collect.  Ahem.  lol.gif

You make some interesting points, but regardless of the source, price fixing once proved is usually followed by a treble damage judgement.  But a judgement is not the amount finally paid.  Declaring bankruptcy is precisely the avenue a defendant will follow to avoid paying the damages when a judgement, and a lost cause, is near.  Bankruptcy is a means of coming to an agreement when the defendant cannot pay the full extent of the damages, and the plaintiff then receives perhaps pennies on the dollar.  But Meade will reorganize and carry on separately from Ningbo Sunny.  The point I was trying to make is that a way will be found to ensure that Meade's mostly excellent products continue to reach the consumer.  The value of those products, including the part that exceeds the price paid (known as consumer's surplus) makes it socially efficient for Meade to survive.


Edited by Upstate New Yorker, 15 December 2019 - 07:07 AM.

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#32 jgroub

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Posted 14 December 2019 - 04:24 PM

You make some interesting points, but regardless of the source, price fixing once proved is usually followed by a treble damage judgement.  But a judgement is not the amount finally paid.  Declaring bankruptcy is precisely the avenue a defendant will follow to avoid paying the damages when a judgement, and a lost cause, is near.  Bankruptcy is a means of coming to an agreement when the plaintiff cannot pay the full extent of the damages, and the plaintiff then receives perhaps pennies on the dollar.  But Meade will reorganize and carry on separately from Ningbo Sunny.  The point I was trying to make is that a way will be found to ensure that Meade's mostly excellent products continue to reach the consumer.  The value of those products, including the part that exceeds the price paid (known as consumer's surplus) makes it socially efficient for Meade to survive.

Well, no, it won't.  Meade has put itself up for sale.  

 

"Meade Instruments Corp. will seek to sell itself through a bankruptcy court-supervised sale process, a lawyer for company says in a status conference Wednesday."

 

https://news.bloombe...eek-sale-lawyer


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#33 Upstate New Yorker

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Posted 14 December 2019 - 04:42 PM

Well, no, it won't.  Meade has put itself up for sale.  

 

"Meade Instruments Corp. will seek to sell itself through a bankruptcy court-supervised sale process, a lawyer for company says in a status conference Wednesday."

 

https://news.bloombe...eek-sale-lawyer

The statement by the lawyer gets to the point.  The lawyer is saying that Meade will head to Bankruptcy Court, in which a negotiated settlement with Orion will be reached.  The amount, perhaps not disclosed, will be less, maybe much less, than the 50.4 $ million, in order that it can be paid.  Bankruptcy logically follows catastrophic judgments against a firm, like this one.  Chapter 11 bankruptcies are designed to satisfy both parties.

 

I'm certain that Ningbo Sunny views Meade as a liability.  Spinning off Meade means Ningbo Sunny's profitable businesses on the mainland cannot be subject to actions in the U.S.  The two firms will part ways, and probably Meade will be owned by a private equity firm.

 

For the record, I like Meade's products, and I have benefited from them.  I want Meade to survive.  



#34 MikeBY

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Posted 15 December 2019 - 04:43 AM

I'm updating this post to provide links to some of the pertinent court documents in the case so that there will be less confusion, and less misinformation.

I think that it is important that Meade survive. It is also imperative that the current senior management and board be replaced fully.  Unfortunately the two major players in this collusion scheme are Ningbo Sunny (China)  and Synta (Taiwan - China).  The original complaint was filed against both. Synta settled with Orion and is referred to as the Settling Manufacturer in the First Amended Complaint. The two companies worked to deny JOC's purchase of Meade and unfairly shared financial resources to fund the Sunny bid in the first steps of their collusion. It is clear that the two companies, representing 90% of the manufacturing of amateur telescopes share common ownership connections through family and have worked to hide the relationships. It may be beyond the reach of US regulators to insure that they do not continue cooperation, and since both IP and physical manufacturing equipment have been transferred between them in non-compete arrangements, it becomes impossible to repair the market without the parent companies being broken up by the Chinese government. Perhaps the Chinese will pursue them because of the illegal financial arrangements that effectively moved ALL of Orion's payments out of Mainland China and into Taiwan. If they were doing the same thing with all their overseas business, it is a major money laundering operation that would require falsifying the books.
 

The Partial Judgement entered was for $50.4 Million. This is a Partial Judgement based on the Jury's findings of $16.8 Million in damages. Fees and costs were also awarded. You can expect that fees and costs (both Meade's and Orion's combined) will probably amount to $4 to 5 Million based on the creditor listings in the BK
There is other relief available to Orion as well, including disgorgement, which would REQUIRE the sale of Meade.  Orion is Listed as a creditor on in the filing by Meade in BK court. listed as 14-50 Million. Obviously, Orion will be pursuing this in the BK court. Filing for the BK protects Meade operations and allows the orderly resolution of the debts. There is financial news (Bloomberg) that Meade will be sold. That is not unexpected. 

 

If you want to read the partial judgement entered by the court see below. It is linked here https://www.telescop...al_Judgment.pdf

 

 

In short, Meade and the Sunny subsidy rushed to file the BK before the judgement was entered. 

User Jgroub indicated that the Orion didn't win on Federal statutes. That is incorrect.
Orion won on Federal Statutes AND CA State statutes. The Judge ordered a Partial Judgement in favor of Orion and retains jurisdiction of the case over the partial judgement and remaining claims under several CA statutes. The partial judgement does not preclude Orion from going back to court to enforce after the lifting of the automatic stay because of the BK filings. There are also additional claims for equitable relief that the court reserves jurisdiction on. There may be some confusion because the original complaint was denied. The First Amended Complaint is what you want to look at.
In the Defendant's motion to dismiss the FAC (First Amended Complaint) the court's ruling denying the dismissal gives a very concise list of the dispute of Orion's claims  and why the court ruled in favor of Orion. It then moved to Jury trial. Read the FAC for the full complaint.  In looking at the Jury Verdict sheet, Orion won on ALL counts. 

 

There will be rocky roads ahead in the market, but hopefully Clear Skies. 

Perhaps in the future we will see significant interest in  integrating technologies, innovation and lower prices

First Amended Complaint link https://www.telescop...d_Complaint.pdf

Exhibit 1 - to FAC link https://www.telescop...d_Complaint.pdf

Jury Verdict For link https://www.telescop...ury_Verdict.pdf

 

 

This is the Final Order pursuant to Federal Rule of Civil Procedure 54(b) entering partial
judgment on the jury’s verdict (Dkt. No. 501) (the “Verdict”) in favor of Plaintiff Optronic
Technologies, Inc. (“Orion”) against Defendant Ningbo Sunny Electronic Co. Ltd. (“Defendant”)
as to Orion’s claims for damages under Section 1 of the Sherman Act, Section 2 of the Sherman
Act, Section 7 of the Clayton Act, and the California Cartwright Act, Cal. Bus. & Profs. Code §
16600, et seq. (collectively, the “Damages Claims”).1
Judgment is entered on the Damages Claims in the amount of $50,400,000 in accordance
with the Verdict’s award of $16,800,000 in damages as trebled pursuant to 15 U.S.C. § 15(a), with
post-judgment interest thereon from the date of entry of judgment at the applicable federal postjudgment interest rate until paid in full. Orion is further awarded its costs of suit and reasonable attorney’s fees pursuant to 15 U.S.C. § 15(a).

IT IS SO ORDERED.
Dated: December 5, 2019

 

1.The Court does not enter judgment and reserves jurisdiction over Orion’s claims for equitable

relief, including its claims under California Unfair Competition Law (Bus. & Profs. Code §§
17200 et seq.) and Section 16 of the Clayton Act. This Judgment also is without prejudice to the
Court’s jurisdiction to enter judgment upon application by Plaintiff against Defendants Meade
Instruments, Corp. and Sunny Optics, Inc. upon lifting of the automatic stay imposed by their
respective bankruptcy filings.

 

The relief asked for by Orion in the First Amended Complaint is as follows

 

WHEREFORE, Plaintiff prays that the Court issue the following relief:
A. Equitable relief, including without limitation, divestiture and an injunction
prohibiting Defendants’ illegal practices;
B. Compensatory damages in the amount of at least $10,000,000;
C. Treble damages of at least $30,000,000;
D. Restitution;
E. Disgorgement of ill-gotten assets and property;
F. Punitive Damages;

G. Attorneys’ fees and costs; and
H. All such other and further relief as the Court may deem just, proper, and equitable.


Edited by MikeBY, 15 December 2019 - 05:23 AM.

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#35 Upstate New Yorker

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Posted 15 December 2019 - 07:10 AM

I'm updating this post to provide links to some of the pertinent court documents in the case so that there will be less confusion, and less misinformation.

I think that it is important that Meade survive. It is also imperative that the current senior management and board be replaced fully.  Unfortunately the two major players in this collusion scheme are Ningbo Sunny (China)  and Synta (Taiwan - China).  The original complaint was filed against both. Synta settled with Orion and is referred to as the Settling Manufacturer in the First Amended Complaint. The two companies worked to deny JOC's purchase of Meade and unfairly shared financial resources to fund the Sunny bid in the first steps of their collusion. It is clear that the two companies, representing 90% of the manufacturing of amateur telescopes share common ownership connections through family and have worked to hide the relationships. It may be beyond the reach of US regulators to insure that they do not continue cooperation, and since both IP and physical manufacturing equipment have been transferred between them in non-compete arrangements, it becomes impossible to repair the market without the parent companies being broken up by the Chinese government. Perhaps the Chinese will pursue them because of the illegal financial arrangements that effectively moved ALL of Orion's payments out of Mainland China and into Taiwan. If they were doing the same thing with all their overseas business, it is a major money laundering operation that would require falsifying the books.
 

The Partial Judgement entered was for $50.4 Million. This is a Partial Judgement based on the Jury's findings of $16.8 Million in damages. Fees and costs were also awarded. You can expect that fees and costs (both Meade's and Orion's combined) will probably amount to $4 to 5 Million based on the creditor listings in the BK
There is other relief available to Orion as well, including disgorgement, which would REQUIRE the sale of Meade.  Orion is Listed as a creditor on in the filing by Meade in BK court. listed as 14-50 Million. Obviously, Orion will be pursuing this in the BK court. Filing for the BK protects Meade operations and allows the orderly resolution of the debts. There is financial news (Bloomberg) that Meade will be sold. That is not unexpected. 

 

If you want to read the partial judgement entered by the court see below. It is linked here https://www.telescop...al_Judgment.pdf

 

 

In short, Meade and the Sunny subsidy rushed to file the BK before the judgement was entered. 

User Jgroub indicated that the Orion didn't win on Federal statutes. That is incorrect.
Orion won on Federal Statutes AND CA State statutes. The Judge ordered a Partial Judgement in favor of Orion and retains jurisdiction of the case over the partial judgement and remaining claims under several CA statutes. The partial judgement does not preclude Orion from going back to court to enforce after the lifting of the automatic stay because of the BK filings. There are also additional claims for equitable relief that the court reserves jurisdiction on. There may be some confusion because the original complaint was denied. The First Amended Complaint is what you want to look at.
In the Defendant's motion to dismiss the FAC (First Amended Complaint) the court's ruling denying the dismissal gives a very concise list of the dispute of Orion's claims  and why the court ruled in favor of Orion. It then moved to Jury trial. Read the FAC for the full complaint.  In looking at the Jury Verdict sheet, Orion won on ALL counts. 

 

There will be rocky roads ahead in the market, but hopefully Clear Skies. 

Perhaps in the future we will see significant interest in  integrating technologies, innovation and lower prices

First Amended Complaint link https://www.telescop...d_Complaint.pdf

Exhibit 1 - to FAC link https://www.telescop...d_Complaint.pdf

Jury Verdict For link https://www.telescop...ury_Verdict.pdf

 

 

This is the Final Order pursuant to Federal Rule of Civil Procedure 54(b) entering partial
judgment on the jury’s verdict (Dkt. No. 501) (the “Verdict”) in favor of Plaintiff Optronic
Technologies, Inc. (“Orion”) against Defendant Ningbo Sunny Electronic Co. Ltd. (“Defendant”)
as to Orion’s claims for damages under Section 1 of the Sherman Act, Section 2 of the Sherman
Act, Section 7 of the Clayton Act, and the California Cartwright Act, Cal. Bus. & Profs. Code §
16600, et seq. (collectively, the “Damages Claims”).1
Judgment is entered on the Damages Claims in the amount of $50,400,000 in accordance
with the Verdict’s award of $16,800,000 in damages as trebled pursuant to 15 U.S.C. § 15(a), with
post-judgment interest thereon from the date of entry of judgment at the applicable federal postjudgment interest rate until paid in full. Orion is further awarded its costs of suit and reasonable attorney’s fees pursuant to 15 U.S.C. § 15(a).

IT IS SO ORDERED.
Dated: December 5, 2019

 

1.The Court does not enter judgment and reserves jurisdiction over Orion’s claims for equitable

relief, including its claims under California Unfair Competition Law (Bus. & Profs. Code §§
17200 et seq.) and Section 16 of the Clayton Act. This Judgment also is without prejudice to the
Court’s jurisdiction to enter judgment upon application by Plaintiff against Defendants Meade
Instruments, Corp. and Sunny Optics, Inc. upon lifting of the automatic stay imposed by their
respective bankruptcy filings.

 

The relief asked for by Orion in the First Amended Complaint is as follows

 

WHEREFORE, Plaintiff prays that the Court issue the following relief:
A. Equitable relief, including without limitation, divestiture and an injunction
prohibiting Defendants’ illegal practices;
B. Compensatory damages in the amount of at least $10,000,000;
C. Treble damages of at least $30,000,000;
D. Restitution;
E. Disgorgement of ill-gotten assets and property;
F. Punitive Damages;

G. Attorneys’ fees and costs; and
H. All such other and further relief as the Court may deem just, proper, and equitable.

Very nice job of specifying the details of the case, Mike.  Thanks for doing this.


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#36 Upstate New Yorker

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Posted 15 December 2019 - 07:41 AM

Hi All,

 

Here is some general information that may or may not be useful.  If you navigate over to the Sunny Optical Technology Group (Subsidiary) homepage and request English instead of Mandarin you will find interesting reading, including this mission statement:

 

"Investor Relations

Focus on the beauty of science and technology

Implement the strategy of a supporting role,
become the world's leading integrated optical products manufacturing enterprises."

 

The middle line indicates that the supporting role is to be replaced later on by world leadership in the field.

 

What's intriguing is a definite love of science--management is highly trained--combined with a strong sense of direction for the company.  I also looked up the management team, and it is very impressive.  Education is admired and respected.  But at the same time, the legal matrix for the firm is despotic.

 

I think there is a lesson in here for us.  



#37 kennyrichmond

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Posted 15 December 2019 - 07:50 AM

Just to be clear, the partial judgment entered in favor of Orion was against Ningbo/Sunny, the Chinese parent.  Orion can, without any doubt, have the BK stay lifted as to Ningbo/Sunny.  Ningbo/Sunny may then proceed with the post-trial motions, appeals, etc. while Orion can attempt to execute upon US held Ningbo/Sunny assets. Good Luck with that, Orion.  As to Meade, the primary subject of this discussion, getting the automatic stay of proceedings lifted in order to permit the trial court to enter a judgment for punitive damages (which can be exempt from discharge in bankruptcy when malice is shown), even if successful, avails Orion nothing.

In the Exhibit 1 .pdf that you linked above, Peter Ni (who was never named as a defendant) became the priority creditor by obtaining the subordination of Meade's lender(s). What this means is that Meade's lenders got behind Ni, kind of like your mortgage company agreeing to substitute a second mortgage for its first.  As documented by Exhibit 1, Ni lent Meade $1 million evidenced by a financing statement and secured the repayment with a first position security interest in all of Meade's existing assets, inventory, work in progress, good will, name, trade style and after acquired property.   Peter Ni, Chairman and CEO of Ningbo/Sunny Ltd is insulated from any attempt by Orion to convert his "loan" to "capital" in order to destroy the effect of the financing statement and security interest and free up Meade's assets for Orion.  There was a valid reason for the loan to Meade by Ni cited in the Exhibit.  It was supported by "consideration" so any conversion of the loan to equity fails.

Peter Ni created two limited liability companies to achieve the merger with Meade.  He was well advised legally throughout the transaction.  His lien on Meade's assets is doubtless, very secure.


Edited by kennyrichmond, 15 December 2019 - 08:10 AM.

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#38 jgroub

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Posted 15 December 2019 - 11:29 AM

User Jgroub indicated that the Orion didn't win on Federal statutes. That is incorrect.

My humblest apologies.  I thought I had read a court order resulting from the summary judgment motion where the court dismissed the federal claims.  Obviously, I was wrong and my memory failed me.  Sorry.  

 

Thank you, MikeBY, for setting the record straight.  I do not want to mislead.  



#39 Chris Lord

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Posted 04 January 2020 - 03:24 AM

I wonder what will become of their plant in Mexico?


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#40 jgroub

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Posted 04 January 2020 - 02:46 PM

I wonder what will become of their plant in Mexico?

So wonder we all, Chris.  



#41 Paul Sweeney

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Posted 07 January 2020 - 08:50 AM

Hi all,

 

Having been through an insolvency as Head of Finance and Controlling, I find this all very interesting. But Meade declaring itself insolvent does not mean that it is so. First, the court will appoint auditors, usually a legal office specializing in insolvency, to audit the books. These people show up and literally take over until they have made their audit. This can take several months. When the results are for insolvency, then the insolvency process proceeds. But they may find out that the insolvency was just a show to avoid the settlement. For example, intercompany receivables and payables may stay on the books for years without ever being paid, because at corporate level, it makes no difference where the money sits. So Synta may have collected their money from Meade without paying what Synta owes Meade, thus draining the Meade bank accounts. They may also have billed Meade for trumped up management fees, with the contracts back-dated a few years. There are lots of ways to "create" an insolvency. The criminal energy that gets released when money is involved! So I am sure that we haven't heard the end of this yet.


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#42 MikeBY

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Posted 08 January 2020 - 11:17 AM

@Paul Sweeney

It is obvious that the US subs (Meade and Sunny) filled the BK to get in ahead of the court's ruling being filed. It serves to protect operations and for the private holders to gain some control over the process.  It may help shield the Chinese owner as well. 

Part of the settlement Orion asked for is that Sunny disgorge itself of Meade. So Meade being put up for sale is no surprise. I'm not sure how the IP will get transferred back to Meade. That kind of damage can't easily be undone once a foreign Corp. has the info. 

 

I haven't heard much further,  but the court retained jurisdiction and this was only a partial settlement, so clearly more is to come.  It'll be complicated as the BK court and civil court must coordinate. 

 

The lawyers did well with this one. 

I hope this will be a fresh start for Meade and a new management team will take over and realize the untapped potential this company has. 

I've watched it for years frustrated by what I see as major management issues. 

It's a company I'd love to run, but that's another story. 


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#43 ccormsby

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Posted 08 January 2020 - 12:13 PM

All this legal review is interesting, but can someone comment on what current owners of Meade equipment should do if:

 

1. They have Meade equipment that needs factory repair (I have a 07080 Zero Image Shift-Electronic Micro-Focuser that needs service)

2. They are awaiting Meade products that are back-ordered (seems like a small thing BUT I bought a Stella WiFi unit to use with my LX600 that needs a stupid #507 cable set for the AutoStar II controller that is "back-ordered" everywhere -- Even at Meade).

 

Are we SOL? I guess just wait and see what happens.



#44 adiastra

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Posted 08 January 2020 - 01:41 PM

Amazon has your part 

 

https://www.amazon.c...8&condition=all


Edited by aperseghin, 08 January 2020 - 02:29 PM.


#45 adiastra

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Posted 08 January 2020 - 02:33 PM

I would like to point out that filing chapter 11 normally means going out of business however it also does not always mean that the brand is going away. During chapter 11 restructuring it is normal for pieces of the business (patents, manufacturing facilities, institutional knowledge and other intellectual properly) to be sold, often to a competitor. These assets can be bought for below actual market value or be sold to the highest bidder. 

 

I would guess that the Meade brand has value and will live on though either Orion or Celestron. 



#46 carolinaskies

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Posted 09 January 2020 - 09:50 AM

I would like to point out that filing chapter 11 normally means going out of business however it also does not always mean that the brand is going away. During chapter 11 restructuring it is normal for pieces of the business (patents, manufacturing facilities, institutional knowledge and other intellectual properly) to be sold, often to a competitor. These assets can be bought for below actual market value or be sold to the highest bidder. 

 

I would guess that the Meade brand has value and will live on though either Orion or Celestron. 

You are wrong.  Chapter 11 doesn't mean 'going out of business'.  That's not why it was created.

Many companies have declared C11, GM declared Chapter 11... are they gone? Nope. 

Chapter 11 is a legal business device to keep creditors (of whatever kind) from gutting an otherwise viable business.  C11 allows the business time to figure out how to reorganize the financial side of a business.  For a company that produces equipment C11 is a way to sustain business which brings in revenue which is what pays 

There are companies which are run very poorly that don't survive C11.  Their business model, overhead, lack of modernization, etc can all lead to closure.  But in this case, C11 is being declared because of a lawsuit, not because of an unhealthy company.  

BTW, doubtful Celestron will be allowed to buy Meade as the reverse was tried around 2002 and the federal government denied the acquisition because it would have limited the competition in the telescope market.  

I hope Orion can't get ahold of it either, because they are simply a middleman for the past 20+ years and are the progenitors of this problem with their lawsuit to begin with.  

I'd opt for iOptron if anyone, because that would put the SCT lineup in very capable hands indeed.  


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#47 carolinaskies

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Posted 09 January 2020 - 09:51 AM

All this legal review is interesting, but can someone comment on what current owners of Meade equipment should do if:

 

1. They have Meade equipment that needs factory repair (I have a 07080 Zero Image Shift-Electronic Micro-Focuser that needs service)

2. They are awaiting Meade products that are back-ordered (seems like a small thing BUT I bought a Stella WiFi unit to use with my LX600 that needs a stupid #507 cable set for the AutoStar II controller that is "back-ordered" everywhere -- Even at Meade).

 

Are we SOL? I guess just wait and see what happens.

C11 is for the financial side of the business, not the product or service side.  Wish people understood that better.  



#48 adiastra

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Posted 09 January 2020 - 02:23 PM

I understand what Chapter 11 means, and in most cases that reorganization of financial liability (debt) comes at a price. Meade has declared bankruptcy and will need to satisfy its debt. Chapter 11 protects them while they get their **** together and prep for the next step (paying the debt). Again i suspect that they will be selling some of their IP to assist in that process. Especially outdated IP (read: old designs and technology). 

 

Meade is not getting a government bailout like GM so that point is moot. 

 

Meade will have to liquidate their assets to satisfy their responsibility. They have been hit HARD with instant debt. They cant pay for it without selling assets. Meade Europe was sold for just over 12 million just over 10 years ago.

 

You may see the glass as half full, and I respect that outlook, but the Meade you know and love is liquidating. 


Edited by adiastra, 09 January 2020 - 02:38 PM.


#49 jgroub

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Posted 09 January 2020 - 02:36 PM

I hope Orion can't get ahold of it either, because they are simply a middleman for the past 20+ years and are the progenitors of this problem with their lawsuit to begin with.  

Wow, blame the victim much

 

For someone who professes to know a lot about bankruptcy law, you are willfully missing the entire point of the underlying lawsuit that caused Meade to file for bankruptcy in the first place:  That Meade and Celestron (through their parent companies, Sunny and Synta) combined to try to run Orion out of business.  That's what the emails showed, and that's what the jury found.  

 

Sheesh!  



#50 Chris Lord

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Posted 09 January 2020 - 05:04 PM

Meade & Celestron at one time had about 75% of the market. Not a healthy situation.
Competition reduced that, and hopefully it will be eventually reduced to a bad memory.


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