Staff at the European affiliate of Tough Mudder have returned to work today (Monday) after Michael Solomons and Andrew Pear of restructuring, recovery and insolvency specialists, BM Advisory LLP, were appointed joint administrators of the business.
The US wing of Tough Mudder and its UK-based European operation are now the subject of parallel bankruptcy proceedings after a standoff between the company’s co-founders, Will Dean and Guy Livingstone, and its largest lender Active Networks caused the company to cease trading.
Earlier this month Dean and Livingstone were accused of placing the company in a state of paralysis and ignoring the interests of creditors in holding out for a larger share of the company’s proposed sale to rival Spartan Race.
Spartan made a ‘seven-figure’ offer for Tough Mudder in November last year and agreed to acquire the trade debt across all Tough Mudder entities. But the disagreement about the sale caused the company and its European, Canadian and German affiliates to suspend registrations and ‘go dark’ towards the end of last year.
The appointment of the UK administrators comes just days after the judge presiding over bankruptcy proceedings against the US wing of the company filed an order on 24 January directing the appointment of a Chapter 11 trustee.
But SportBusiness understands the US part of the business (Tough Mudder Inc) still hasn’t resumed operations and there are frustrations at the speed of the bankruptcy process in the US.
The administrators at BM Advisory have restarted operations at the European wing (Tough Mudder Ltd), which is a a separate legal entity, with a view to selling the business and its assets, including its wholly-owned German subsidiary, as a going concern.
Spartan Race has supported the European subsidiary’s administration process with the necessary funding to resume trading. The joint administrators have also engaged both Giles Chater and Kyle McLaughlin, formerly of the Tough Mudder Ltd management team, to support the business going forward while a sale is achieved. Under the administrators, ticket sales are planned to re-open mid-week.
The deadline to register an interest in purchasing the business and assets of the European affiliate is the end of this week and interested parties should contact Bryn Carroll of Gordon Brothers.
Spartan remains the most likely buyer for the US and European parts of the business, provided the US business resumes operations soon. A separate sale of the European affiliate would be complicated by the fact that the Tough Mudder brand and its intellectual property is controlled by the US branch.