Motorcycles of Manchester - Chapter 11 Case Summary

Motorcycles of Manchester filed for Chapter 11 to pursue a going-concern sale of their eight-location New England powersports dealership business after a post-pandemic performance decline, higher interest costs on debt-funded expansion, floorplan lender accelerations and a delayed affiliate real estate sale strained liquidity. The debtors are negotiating potential DIP financing with prepetition lender MutualOne Bank and a stalking horse bid from a multi-location motorsports dealer.

Business Description

Motorcycles of Manchester, Inc. ("MOMS"), based in Manchester, New Hampshire, together with its subsidiaries Wheel Freedom LLC ("Wheel Freedom"), MOMS Middlesex LLC ("MOMS Middlesex") and MOMS Northampton LLC ("MOMS Northampton," and collectively with MOMS, Wheel Freedom and MOMS Middlesex, the "Debtors"), operates a powersports dealership business with multiple locations and multiple brands. The dealerships sell new and used motorcycles, all-terrain and side-by-side vehicles, personal watercraft, snowmobiles and power equipment, along with related parts and accessories.

The Debtors operate from eight locations in four states: Concord, Manchester and Gorham, New Hampshire; Foxboro, Northampton and Tyngsboro, Massachusetts; Topsham, Maine; and Enfield, Connecticut. They filed Chapter 11 in the U.S. Bankruptcy Court for the District of New Hampshire on October 30, 2026 (the "Petition Date").

Corporate History

The business was founded in 1973, and MOMS was incorporated in New Hampshire on April 1, 1987. Joel H. Wheeler, Jr. began working full time for MOMS in 2003, acquired the business from Wheeler's father in 2004, and has served as President of MOMS since approximately that year. After the acquisition, Wheeler opened a dealership in Foxboro, Massachusetts (MOMS South) and then grew the business through a series of acquisitions.

Ownership and Structure

Wheeler owns 100% of the common stock of MOMS. MOMS has also issued Class A Preferred Stock, held by Wheeler and others. MOMS is the sole member of Wheel Freedom, MOMS Middlesex and MOMS Northampton, and Wheeler has served as Manager of each since its formation. The four Debtors split the dealership footprint as follows:

Operations Overview

Dealer Agreements

Each Debtor is an authorized dealer for one or more original equipment manufacturers ("OEMs"). Each authorization is governed by a dealer sales and service agreement or a similar agreement between the OEM and the dealer, together with related agreements, addenda and OEM policies (the "Dealer Agreements"). The Dealer Agreements are primarily with Yamaha, Kawasaki, BRP, CFMOTO, Suzuki, Royal Enfield, Triumph, Honda and Ducati.

Assets and Real Estate

The Debtors' principal assets are new and used vehicle inventory, parts and accessories, accounts receivable and contracts in transit, cash, furniture, fixtures and equipment, and the Dealer Agreements. Two Wheeler Holdings, LLC ("Two Wheeler"), an affiliate of the Debtors that is not itself a Debtor, owns a property on Manchester Street in Concord, New Hampshire (the "Manchester Street Property") and a property in Enfield, Connecticut (together, the "Real Properties"). Two Wheeler also previously owned a second Enfield property and a building in Foxboro, Massachusetts. Both were sold before the Petition Date, the Foxboro building under a sale-leaseback agreement.

As of the Petition Date, the Debtors' books show approximately $50 million of non-cash total assets on a consolidated, unaudited book-value basis, including capital leases, goodwill and the Real Properties.

Prepetition Obligations

The Debtors have financed their operations primarily through secured bank loans, floorplan financing of new-unit inventory, and trade credit.

MutualOne Loans

Before the Petition Date, MutualOne Bank ("MutualOne") made a series of loans to MOMS, Wheel Freedom, MOMS Middlesex and Two Wheeler, and to certain non-Debtor affiliates, and MutualOne and the loan parties negotiated a Loan Modification Agreement (the "Loan Modification"). The loans it identifies (the "MutualOne Loans") are evidenced and secured by promissory notes, loan agreements, security agreements, mortgages, assignments of leases and rents, guaranties and related documents dated between December 2019 and May 2024. As of the Petition Date, the Debtors' books show approximately $20 million owed on the MutualOne Loans to the Debtors.

The loan documents include several promissory notes executed between 2021 and 2024 by MOMS, MOMS Middlesex, Wheel Freedom and Two Wheeler. In most instances these notes are secured by mortgages granted by Two Wheeler on its real estate, including the Real Properties, and are guaranteed by Wheeler. The Loan Modification also identifies other MutualOne loans to non-Debtor affiliates, secured by other collateral. It defines the Debtor borrowers and the non-Debtor affiliates together as the "borrower" with respect to the "obligations" for the MutualOne Loans.

Floorplan Facilities

The floorplan facilities support the Dealer Agreements and are provided by OEM-affiliated finance companies and third-party lenders. They are generally documented by inventory financing, wholesale financing or loan and security agreements, together with related guaranties. As of the Petition Date, the Debtors' books show approximately $14 million owed to the floorplan lenders. The principal facilities are:

Other Obligations

The Debtors reserve all rights with respect to these amounts and claims, including as to the validity, priority and perfection of any security interest.

Events Leading to Bankruptcy

Acquisition Strategy and Performance

RumbleOn, Inc., which completed its initial public offering on Nasdaq in 2017, acquired the RideNow Powersports dealership group in 2021, creating a publicly traded powersports dealership group. After that deal, MOMS acquired additional dealerships. The goal was to contribute them, together with dealerships owned by other operators, to a larger dealership group with enough scale to access the public capital markets. The Debtors financed that growth largely with debt.

The Debtors' financial performance declined after the COVID-19 pandemic. For 2024, MOMS reported gross receipts of approximately $98.5 million and a book net loss of approximately $7.4 million. At the same time, rising interest rates increased the cost of the Debtors' leveraged capital structure, including floorplan financing. The Debtors attribute their financial deterioration to the combination of these factors.

Loan Modification and Sale Efforts

By February 2026, after efforts to find a potential buyer, the Debtors were approached by a motorsports dealer with multiple locations and franchises and began negotiating with it. In February 2026, in connection with the Loan Modification, the Debtors other than MOMS Northampton, certain non-Debtor affiliates and the individual guarantors informed MutualOne that they had an imminent need to restructure through an acquisition of the businesses by an unrelated third party. Among other things, the Loan Modification required a restructuring of the MutualOne Loans by March 16, 2026. The Debtors would not agree to carry out that restructuring and focused instead on the sale, keeping MutualOne informed of the planned sale structure, which was to be completed in stages. According to the Debtors, MutualOne acknowledged the proposed sale as a viable way to optimize the value of the Debtors' assets. MutualOne, the Debtors' prepetition secured lender, has also expressed interest in providing DIP financing for the cases.

In response to the Debtors' liquidity crisis, Wheeler began selling related-party real estate to support the Debtors' operations, including through sale-leaseback transactions. The Debtors also marketed other properties, including the Manchester Street Property. According to the Debtors, delays caused by the City of Concord in connection with a proposed land-taking kept the Manchester Street Property from being sold before the Petition Date. Had that sale closed as expected, part of the proceeds was to fund operations until the anticipated acquisition of the Debtors' businesses.

Lender and OEM Actions

Yamaha Motor Finance Corporation, USA terminated its inventory financing agreement with the Debtors and accelerated the balance. On September 17, 2026, it filed a verified complaint against all four Debtors in the U.S. District Court for the District of Maine, asserting a claim of approximately $2.8 million. Huntington Distribution Finance Corp. sent a notice of debt acceleration on or about October 16, 2026, and CFMOTO sent a notice of nonrenewal on or about October 22, 2026.

The Debtors attribute the filing to these pressures and to an "unnecessary and improper" delay in closing the Manchester Street Property sale. In their account, these left them unable to pay obligations as they come due without a Chapter 11 process to complete a sale. The Debtors had kept MutualOne informed of the sale negotiations and of liquidity issues they describe as reaching critical levels, and then notified MutualOne that they intended to file.

Chapter 11 Filing

The Debtors filed the cases to preserve the value of their dealership operations and assets while they pursue a sale through a Chapter 11 sale process. Before the filing, both MutualOne and the proposed buyer (the multi-location motorsports dealer the Debtors had been negotiating with) expressed interest in providing a DIP facility. That facility would come with either a stalking horse bid from the proposed buyer or a sale motion seeking bids from third parties. Hoping MutualOne and the buyer would agree on both a stalking horse bid and a DIP facility, the Debtors commenced the cases with the knowledge of both, with the aim of keeping as many of the franchises as possible. The Debtors are working with MutualOne on the proposed DIP facility and sale motion, and with the proposed buyer on a stalking horse offer. Negotiations are continuing, and according to the Debtors, their current priority is stabilizing the business and its employees.

According to the Debtors, their value lies mainly in the going-concern dealership operations, the Dealer Agreements and the related market areas, a trained workforce, customer relationships and the service business, parts and vehicle inventory, and the Real Properties. The Debtors expect a going-concern sale to bring substantially more for creditors than a piecemeal liquidation, in which the franchise value would be lost.