Privately-held Hobbico filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 18-10055. The Company is located in Champaign, IL and presently led by Tom O’Donoghue, Jr. as C.R.O. Hobbico is represented in bankruptcy proceedings by Robert J. Dehney of Morris, Nichols, Arsht & Tunnell LLP.
Hobbico was founded in 1971 and is 100% employee-owned. According to documents filed with the Court, “The Company is one of the world’s largest designers, manufacturers, and distributors of radio control (‘R/C’) and general hobby products, including radio control vehicles, drones, model rockets, model kits, and general hobby products. The Company markets and sells thousands of these products across more than 250 brands, many of which are proprietary.”
The Declaration continues, “In order to support the financial requirements of several acquisitions over the years, the Debtors incurred and began carrying a heavy debt load. Beginning in 2016, the Debtors’ businesses began to struggle due to a number of factors which included…a lack of investment in product innovation and its core platform coupled with a systemic shift in the drone market. In the second half of 2016, these challenges became more acute with the disruption of the Debtors’ supply chain in Asia due to the financial distress of multiple key suppliers. These factors all combined to negatively impact the Debtor’s sales and profitability and, in conjunction with elevated debt service obligations, resulted in defaults under these debt obligations and a sharp decrease in liquidity and financial flexibility.”
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