It was one of the biggest automotive brands to emerge in the 2010s. Now, it's far from that.
Hoonigan has filed for chapter 11 bankruptcy in Delaware, in which it revealed that the company is $1.2 billion in debt. Through the restructuring, the company hopes to come out of chapter 11 and secure $570 million in new funding.
In a media release, the company said that:
The Hoonigan Racing Division is a motor racing team that competes in the American Rally Association.
Founded by the late Ken Block as Monster World Rally Team at the beginning of 2010, it was originally meant to be his platform to compete at world championship events.
Thanks to sponsors, like Monster Energy and his own DC Shoes brand, Block managed to build unique and high-powered vehicles, including the rallycross-spec Ford Fiesta ST, the heavily modified Group B Ford RS200, the highly-modified Hoonicorn and Hoonitruck, the Audi S1 Hoonitron, and more.
But it was in 2017, that Hoonigan announced its withdrawal from the World Rallycross Championship, and started focusing on being an automotive brand instead.
Wheel Pros, which acquired Hoonigan, stripped the brand's equity from motorsports, to enhance its merchandise and media company efforts.
And here, the Hoonigan brand experienced the troubles after initiating relentless acquisitions.
Under the backing of Clearlake Capital, Wheel Pros went on an acquisition spree, gobbling up brands it could find.
As a result of this aggressive expansion plan, the automotive lifestyle brand wounded up over a billion dollars in debt, in just over a decade after it was founded.
Hoonigan’s bankruptcy also comes amid a decline in automotive media in general.
For its part, Hoonigan has a significant presence on YouTube.
The Hoonigan channel has created and uploaded a lot of videos, many of which have millions upon millions of views.
However, the channel started experiencing a decline, especially following Ken Block's death, and after it lost many of it’s biggest content creators.
Vance Johnston, CEO of Hoonigan, called the bankruptcy an important step for the company.
In other words, Johnston wishes to use the bankruptcy in efforts to improve financing and support long-term growth.
Hoonigan has filed a pre-packaged restructuring support agreement, in which creditors could take majority ownership of the company under the terms of the restructuring agreement.
This time, Hoonigan is not the only iconic brand to experience difficulties.
Brands like Recaro, a German company that specializes in designing and manufacturing high-quality automotive seats, and BBS, a German manufacturer known for producing high-performance wheels for both street and racing cars, are also experiencing financial troubles
