Norton Motorcycles has gone into administration three weeks after being in court for non-payment of £300,000 (about $A570k) in taxes owed to HM Revenue & Customs.
Global accounting firm BDO UK has been appointed administrators of the 122-year-old British company, resurrected in 2008 when business man Stuart Garner bought the company.
Australian customers have been assured their deposits will be returned and service and parts will continue.
Path to administration
Norton was in the Insolvency and Companies Court in London on 8 January 2020 in an effort to avoid a winding-up petition over its tax bill.
Stuart had said some of the money was covered by outstanding research and development tax relief owed to the company.
The company was promised a £4 ($A7.6) million government grant in 2015, but £135,000 ($257k) was still outstanding, having been held back by the HRMC over the unpaid taxes.
Stuart said they had paid £300,000 of a £600,000 bill to HMRC and had asked for 63 days for the outstanding amount to be settled.
The hearing was adjourned until 12 February 2020.
However, BDO was called in yesterday (29 January 2020).
BDO spokesman Lee Causer they will “determine and execute the most appropriate strategy as swiftly as possible to protect creditors’ interests, bearing in mind the need to minimise distress for all parties”.
“We are currently assessing the position of each of the companies in order to conclude upon the options available to them and the most appropriate way forward.”
We contacted Lee for an update on administration proceedings, whether production had ceased and the order of payment of creditors. We will update when he replies.
As usual, the tax bill will be top of the list.
Motorbike Writer has also tried to contact Norton Global Sales & Marketing boss Kay Johnson for comment, but his emails now bounce back.
When we contacted her after the court appearance she assured us they were operating business as usual and invited me to visit the historic Castle Donington factory next time I’m in the UK.
Sadly that visit may never happen now.
The factory employs about 100 people and recently opened a new production line.
Meanwhile, the official website is still operating.
In the UK, when a company goes into administration, it is not necessarily the end.
It protects the company from creditors and winding-up proceedings while a solution can be reached.
The administrator is given eight weeks to send out formal administrative proposals to all of the insolvent company’s creditors and repay “without preference”.
“It appears that one of the most iconic brands in motorcycling has been unable to survive the current pressures on the industry,” he says.
“Australian and New Zealand customers that have placed deposits for new models with their local dealer will be able to receive a full refund for orders.
“However we are not sure what is in line for those that placed orders prior to our distribution with the factory directly. We will obviously do our best to put those customers in touch with the correct people in the UK.
“In regards to existing Norton owners, we still have good stock of servicing parts, and will still be operating to ensure our customers are looked after.
“Ultimately we hope a larger brand with more experience will come in and continue the brand however this is purely speculation and we have had no official correspondence.”
Norton has been through some turbulent times.
Then customers started complaining that the V4 and some other models had not been delivered, despite deposits and even full payment being made.
One customer who paid for a V4 even started up a petition to wind-up the company in the Business and Property Courts in Manchester.
Kay says this was a dispute over several months with freight company DHL that was resolved and the action dismissed by “mutual consent”.
“At no point was it ever about a motorcycle, it’s solely over import and export duty on components,” he said.
Mid-year Norton signed a £20m deal with Japan to deliver an extra 1000 motorcycles worth £5m to Japanese riders over the next five years.
Things were looking up.
But in November, the company seemed to struggle for cash and launched a crowd-funding campaign to meet a £30 million order book for V4 and Atlas models.
However, a single, anonymous investor sunk £1m ($1.89m) into the company, pausing the campaign.
Stuart said he has not ruled out returning to the crowd-funding campaign at a later date.
In the same month, Norton announced it would produce the127kW supercharged Superlight SS off the Atlas platform.
Kay said in November they were on track with production.
“We are currently making Atlas chassis and other components ready for production/deliveries next month,” she told us in October.
“First customers have been advised and we look forward to deliveries shortly.”
Sadly it looks like those deliveries will not happen, the Atlas will never make it into production and customers who have paid deposits will have to stand in line for a refund.