Boyds Wheels Plan Would Block Control by Namesake
Creditors of bankrupt custom wheel maker Boyds Wheels Inc. filed a reorganization plan Tuesday that would block famed hot-rod builder Boyd Coddington from regaining control of the Stanton-based company.
The new plan would put a resurrected Boyds Wheels under the control of an auto racing and performance parts company run by Andrew Evans, a close friend of and longtime financial advisor to software billionaire Bill Gates.
Evans is a colorful figure who began racing cars after serving a brief prison term in a federal bank fraud case in 1986 and ended up owning several major race tracks and racing teams.
Under the reorganization plan, which competes with a plan filed by Coddington in July, up to $2 million in operating funds for the revitalized company would be provided by Automotive Performance Group, a publicly traded company Evans heads as president and chief executive.
An executive to be hired by APG would run the company, and APG would provide other support, including financial management.
APG also would provide funds to augment cash raised from the recent sale of some of Boyds Wheels’ assets, including manufacturing equipment, to repay 100% of the bankrupt company’s approximately $6 million in secured debt.
Unsecured creditors would receive a 17% stake in the new Boyds Wheels, versus a 12% stake promised under Coddington’s plan. APG--whose thinly traded stock’s price fell by almost 30% Tuesday, to $2 a share--would grant 200,000 of its shares to the unsecured creditors.
Although City National Bank, Boyds Wheels’ largest single creditor, would be the biggest beneficiary of the repayment plan, the bank has said it is backing Coddington’s proposal and “would not support the creditors’ plan under any circumstances,” said James Bastian Jr., attorney for the creditors committee.
General terms of the two plans are pretty close, attorneys for both sides agree.
Coddington was pushed out of Boyds Wheels by creditors before the bankruptcy was filed in December and since has started a new company, B. Coddington Wheels.
Both Coddington and Evans bring baggage to the table as the court and creditors begin examining their plans.
While Coddington is founder of the company and nurtured it from a backyard hobby to a $20 million-a-year business, he also is the executive whose business plan--or lack thereof--pushed the company to the financial brink.
He wasn’t in charge when a yearlong turnaround effort failed and the Chapter 11 bankruptcy was filed--indeed, he says he believes it could have been avoided--but he acknowledges a big share of responsibility for the collapse.
Evans brings a reputation as a brilliant but hard-nosed businessman with a big mistake and a trail of disgruntled associates in his past.
He went to prison for almost five months in 1986 after pleading guilty to bank-fraud-related charges and was barred by the Securities and Exchange Commission from associating with investment advisory firms. The case involved a failed effort by Evans and his wife to save their faltering investment business.
In 1994, Evans won SEC approval to rejoin the investment industry and, with Gates, set up a management fund that handles many of the Microsoft chairman’s investments. He and Gates have been close friends since 1978, and Gates is godfather to all three of Evans’ children.
Evans has owned--and recently sold--two premier North American auto race tracks, Sebring International in Sebring, Fla., and Mosport Park, near Toronto. He now runs his investment business and APG, in which he is the largest shareholder.
APG owns distribution rights to Royal Purple Motor Oil and owns and operates Klein Engines, an Arizona racing engine builder, and Team Scandia, an Indianapolis-based racing team. The company also owns a half interest in the Scandia Bodine NASCAR Winston Cup stock car racing team.
Evans has been criticized for savaging business partners and running roughshod over employees of the companies he acquires.
Klein Engines founder Thomas Klein said he and Evans parted company shortly after he sold his business to APG in April “because Andy and I did not see eye to eye, especially in the handling of people. He is very shrewd, very wealthy and he has left a path of destruction behind him.”
Evans was traveling Tuesday and could not be reached for comment.
But another former partner, Dana Point businessman Dick Simon, sees Evans in a different light.
Simon, a former insurance industry executive, says that he lost his racing team to Evans in 1995 after selling the investment guru what he thought was a 49% interest in the financially struggling business, only to find that the paperwork was drafted to give Evans 51%.
“The guy took away everything we worked for all our lives,” Simon said, “But my wife and I still have a good relationship with him. I’m not bitter. . . . The short story is that I needed Andy Evans and I didn’t do my homework and he did his. . . . He beat me at the chess game.”
