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Meade declares bankruptcy

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#1 kohudson

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Posted 05 December 2019 - 06:21 PM

Sad, but apparently true:

 

https://www.ocregist...antitrust-case/

 

Thanks, Ken


 

#2 kohudson

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Posted 05 December 2019 - 06:23 PM

Oh, just noticed this was already posted in the Equipment section where it may be more appropriate.

 

My apologies.

 

Thanks, Ken


 

#3 Shorty Barlow

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Posted 05 December 2019 - 06:44 PM

AFAIK 'bankruptcy' doesn't necessarily mean initiating a formal insolvency procedure. I believe it can be legalese for "we just need a deal to pay you what we owe over a period of time while still maintaining our status as a viable company".


 

#4 dr.who

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Posted 05 December 2019 - 07:04 PM

Actually it depends on if it is Chapter 7 or 11. 7 is for insolvency and means everything is being liquidated. 11 means the business is attempting to restructure debts. I say attempting because it doesn’t always work and the creditors can force the company into liquidation, especially if the assets are worth more in liquidation than in restructuring the debt. In addition the company is handed to a trustee appointed by the court to run the business, negotiate with creditors, and ultimately decide if there is a path forward or not.

This is happening because the Chinese parent company Ningbo Sunny Electronics Ltd. was found guilty in California civil court of antitrust actions including colluding with other manufacturers in China to fix pricing so that Orion Telescopes, who Sunny outbid Orion for Meade during the first bankruptcy, was forced out of the market. Orion won $16.8 million award recently against Sunny.

Sunny Optics a sister company to Meade and a subsidiary of Ningbo Sunny Electronics has declared bankruptcy as well. These are the two US domiciled subsidiaries of Ningbo Sunny and are the one’s subject to US law. Everything else is international and much harder to act upon. Not impossible but it takes longer and is more expensive to do,

This doesn’t look like it will end well for Meade. The best case is the assets are handed over to Orion but anything made in China can run into problems there if the big telescope component companies decide to engage in retaliatory actions against Orion. It then becomes a International Trade issue since the companies who would do so only have subsidiaries in the US with all manufacturing being done in China outside of what Meade does in Mexico and Celestron does in Torrance California with the 14” EdgeHD SCT’s.
 

#5 markb

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Posted 05 December 2019 - 07:39 PM

Chapter 11 reorg per https://www.ocbj.com...tcy-protection/
 

#6 Shorty Barlow

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Posted 05 December 2019 - 07:39 PM

Actually it depends on if it is Chapter 7 or 11. 7 is for insolvency and means everything is being liquidated. 11 means the business is attempting to restructure debts. I say attempting because it doesn’t always work and the creditors can force the company into liquidation, especially if the assets are worth more in liquidation than in restructuring the debt. In addition the company is handed to a trustee appointed by the court to run the business, negotiate with creditors, and ultimately decide if there is a path forward or not.

This is happening because the Chinese parent company Ningbo Sunny Electronics Ltd. was found guilty in California civil court of antitrust actions including colluding with other manufacturers in China to fix pricing so that Orion Telescopes, who Sunny outbid Orion for Meade during the first bankruptcy, was forced out of the market. Orion won $16.8 million award recently against Sunny.

Sunny Optics a sister company to Meade and a subsidiary of Ningbo Sunny Electronics has declared bankruptcy as well. These are the two US domiciled subsidiaries of Ningbo Sunny and are the one’s subject to US law. Everything else is international and much harder to act upon. Not impossible but it takes longer and is more expensive to do,

This doesn’t look like it will end well for Meade. The best case is the assets are handed over to Orion but anything made in China can run into problems there if the big telescope component companies decide to engage in retaliatory actions against Orion. It then becomes a International Trade issue since the companies who would do so only have subsidiaries in the US with all manufacturing being done in China outside of what Meade does in Mexico and Celestron does in Torrance California with the 14” EdgeHD SCT’s.

So it's curtains for Meade then?


 

#7 eros312

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Posted 05 December 2019 - 07:42 PM

So it's curtains for Meade then?

Not yet. They filed chapter 11, meaning they're trying to restructure their debt. 


 

#8 Shorty Barlow

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Posted 05 December 2019 - 07:49 PM

Not yet. They filed chapter 11, meaning they're trying to restructure their debt. 

That's a relief.


 

#9 dr.who

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Posted 05 December 2019 - 11:41 PM

So it's curtains for Meade then?


Too soon to tell. Maybe they will reach a settlement. Right now this looks like Sunny doing a CYA and protecting assets. This way it forces Orion to the negotiating table. Otherwise they are forking out $16.8 million based on the California civil suit.
 

#10 Dwight J

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Posted 05 December 2019 - 11:52 PM

Meade hasn’t had much luck in the courtroom.  


 

#11 CeeKay

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Posted 06 December 2019 - 02:14 AM

Too soon to tell. Maybe they will reach a settlement. Right now this looks like Sunny doing a CYA and protecting assets. This way it forces Orion to the negotiating table. Otherwise they are forking out $16.8 million based on the California civil suit.

According to the OCR article, Orion's attorney stated that the amount for damages may be trebled... pushing the amount to the neighborhood of $50 million+.


 

#12 sg6

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Posted 06 December 2019 - 04:39 AM

Meade hasn’t had much luck in the courtroom.  

No one has any luck in a courtroom. It is really the state where no one wins whatever the outcome.

Orion will not win, they do not really make their own equipment so are depenadant of others and whoever the others are now will make less available to them, or at a higher cost, or something.

 

So I expect Orion to lose and Meade to lose.

In the other post the evidence seems that Synta worked with Sunny to fix prices so now Synta will be unhappy with Orion and who apparently supplies Orion with their base equipment.

 

If I recall it was said that it was always a case of Celestron and Meade trying to sue each other that caused both to go down and get purchased by China.


 

#13 Shorty Barlow

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Posted 06 December 2019 - 05:03 AM

Too soon to tell. Maybe they will reach a settlement. Right now this looks like Sunny doing a CYA and protecting assets. This way it forces Orion to the negotiating table. Otherwise they are forking out $16.8 million based on the California civil suit.

I suppose this is the inevitable outcome of the Gordon Gekko/Sun Tzu school of business. 

 

https://www.youtube....h?v=t22TpvtLOro


 

#14 jgraham

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Posted 06 December 2019 - 08:15 AM

The end of Meade? I highly doubt it. I suspect that they'll get bought out and soldier on under new management. Personally, I don't see a downside. If they disappear and are not replaced by another manufacturer that suggests that the market is not large enough to support them, and that's not a good thing.

I buy almost all my gear (from multiple manufacturers) from the used market so this doesn't mean too much to me. I kinda ride the wave about 10 years back. This gives plenty of time to let things sort themselves out.

Interesting stuff.
 

#15 Jon Isaacs

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Posted 06 December 2019 - 09:04 AM

In the other post the evidence seems that Synta worked with Sunny to fix prices so now Synta will be unhappy with Orion and who apparently supplies Orion with their base equipment.

 

 

I believe Synta/Celestron settled out of court.. 

 

Jon


 

#16 Terra Nova

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Posted 06 December 2019 - 10:05 AM

The end of Meade? I highly doubt it. I suspect that they'll get bought out and soldier on under new management. Personally, I don't see a downside. If they disappear and are not replaced by another manufacturer that suggests that the market is not large enough to support them, and that's not a good thing.

I buy almost all my gear (from multiple manufacturers) from the used market so this doesn't mean too much to me. I kinda ride the wave about 10 years back. This gives plenty of time to let things sort themselves out.

Interesting stuff.


The end of Meade? If you ask me, Meade drew it’s last breath back in 2013. Since then its been nothing but knock-offs, clones, and repackaged Synta products- the entire LX70 line for example. Meade’s over and been over. It exists in name only (and the color blue, which Synta/Celestron ripped off with their Omni line).
 

#17 Terra Nova

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Posted 06 December 2019 - 10:08 AM

And I could pretty-much say the same for Celestron (Synta). At least SkyWatcher came up with a unique name under which to sell its Synta products. Just call them what they are (Synta)!
 

#18 Starhawk

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Posted 06 December 2019 - 10:18 AM

This behavior by Ningbo Sunny/ Meade as well as Synta/ Celestron is so despicable, it's really hard to put a happy face on any of this situation.  It would seem we found the source of the strong upward trend in telescope pricing over the past few years.  The real winners will be the rest of us, and hopefully other outlets, such as Astronomics.

 

-Rich


 

#19 Terra Nova

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Posted 06 December 2019 - 10:24 AM

This behavior by Ningbo Sunny/ Meade as well as Synta/ Celestron is so despicable, it's really hard to put a happy face on any of this situation.  It would seem we found the source of the strong upward trend in telescope pricing over the past few years.  The real winners will be the rest of us, and hopefully other outlets, such as Astronomics.
 
-Rich


Welcome to the global market-place of cheap labor and weaponized politburo-controlled pseudo-capitalism! Now we can all be on a ramen-noodle diet, shop at Walwart for all our consumables, and still afford a goto-telescope as long as half of it is made out of plastic! (Forgive my lack of optimism.)

Edited by Terra Nova, 06 December 2019 - 10:26 AM.

 

#20 Swanny

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Posted 06 December 2019 - 10:36 AM

I love Ramen Noodles though....the Japanese version of it.  


 

#21 carolinaskies

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Posted 06 December 2019 - 10:55 AM

This is really symptomatic of a middleman... aka "Orion" not happy a supplier became a direct competitor using an existing competitor name. 

The fault really is Sunny rather than Meade USA because most of the commonly shared equipment being produced out of China was Sunny using the Meade brand name.  The real Meade US equipment has always remained the fork arm line w/accessories and SCTs and smattering of refractors of which there aren't equivalents.  Eyepieces, lower end mounts, GEM mounts, etc are almost all shared design variations which were given over to the Chinese firms.

Reorganizing the company through Chapter 11 is simply a way to structure repayment.  I'd love for the true Meade US portion to be bought by a US billionaire and returned to US ownership.     

 


 

#22 SandyHouTex

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Posted 06 December 2019 - 11:41 AM

And I could pretty-much say the same for Celestron (Synta). At least SkyWatcher came up with a unique name under which to sell its Synta products. Just call them what they are (Synta)!

Actually Celestron and Synta are doing pretty good.  Innovative new products (RASA), and number 1 in sales. 


 

#23 SandyHouTex

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Posted 06 December 2019 - 11:46 AM

This is really symptomatic of a middleman... aka "Orion" not happy a supplier became a direct competitor using an existing competitor name. 

The fault really is Sunny rather than Meade USA because most of the commonly shared equipment being produced out of China was Sunny using the Meade brand name.  The real Meade US equipment has always remained the fork arm line w/accessories and SCTs and smattering of refractors of which there aren't equivalents.  Eyepieces, lower end mounts, GEM mounts, etc are almost all shared design variations which were given over to the Chinese firms.

Reorganizing the company through Chapter 11 is simply a way to structure repayment.  I'd love for the true Meade US portion to be bought by a US billionaire and returned to US ownership.     

 

With Sunny and Meade BOTH in bankruptcy, I don’t hold out much hope either will survive.

 

Maybe Skywatcher or Explore Scientific will take the place of Meade.


 

#24 Eddgie

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Posted 06 December 2019 - 11:55 AM

I think a lot of this is really just tangental to the reality that the telescope business is bifurcated between the low margin providers and the high end providers with little in between and in the major markets, the biggest competition for telescope dollars that both of these companies face is the used market here and on Astronomics.

 

You can see this sentiment in the way that dealers like Denkmeier and Orion have towards supporting used equipment.

 

I have bought probably 12 telescopes in the last six or seven years, and only one of them (the 6" f/2.8 PowerNewt) has been new.  All of the others were purchased used.

 

I bought a used Lunt 80 but I actually bought it from Lunt! Lunt figured out that if it gave a decent price for trade-inn, it could clean and refurb the unit, re-serialize it, and sell it probably at more profit than making a new one (or my guess is that they would not bother with a used program).

We now see some telescope dealers that have used equipment programs. 
 

 

Telescopes are a durable good and once it is in the market, unlike an automobile, unless it has some catastrophic failure, it will stay in that market of decades.  I bought and sold a 1973 Celestron C8 about 10 months ago (made a nice profit off of it, thank you).

 

So, Denkmier, Orion, Celestron, and Meade are all competing with a very aggressive and healthy used market and this has a great constraint on the total sales volume.

 

Probably a sizable percentage of telescopes that change hands (dealer to buyer, or private seller to private seller) do so right here on CN, on Astronomics, on Ebay, and Craigslist. 

 

If someone thinks they want a telescope, we live in a world where the first thing they will do is look for a review, and sooner or later they will dump out on Cloudy Nights, where one of use will say "Hey, get this instead, and you can usually find them on CN for a really great price!"

 

I like Russ and Denkmeier, but when someone asks about binoviewers, I almost always say "You can pick up a used Denk for $500".

 

So, it is a brutal market and where there is almost no room for profit and not everyone is in the market for a $2000 telescope and many will try to find it used to save some money. 

 

That being said, I think Meade had a marking model that hurt them.  Meade's primary marketing focus appeared to be more on large, complex integrated fork mounted systems and not everyone wants a big, heavy, fork mounted telescope system.  Celestron weighs its marketing equally between components and compete systems and offers GEM based systems as well, and this is a critical market differentiation. 

 

There is also an increasing market in EAA systems.  I know at least two dozen people that have spent over $4000 on night vision systems rather than spending that money on large fork mounted SCTs. So, we know the money is there for these systems, but with the fight against light pollution completely lost, more people are looking at other options than large imaging rigs.

  

So, I am not surprised to see Meade struggling because I think they mis-marketed more than Celestron, Orion, Skywatcher, and ES and with the tight margins in this market and completion from the used market, I think Meade was simply the most vulnerable.  


Edited by Eddgie, 06 December 2019 - 12:18 PM.

 

#25 Shorty Barlow

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Posted 06 December 2019 - 12:05 PM

And I could pretty-much say the same for Celestron (Synta). At least SkyWatcher came up with a unique name under which to sell its Synta products. Just call them what they are (Synta)!

AFAIK 'Sky-Watcher' is just the house name for Suzhou Synta Optical Technology Co., Ltd. They've marketed under that name in Europe for quite a while. 


 


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