Kyle McLaughlin and Giles Chater – Tough Mudder U.K. Update


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Tough Mudder Interview

Tough Mudder U.K. offices are back open and look to get tickets back online later this week. Kyle McLaughlin and Giles Chater sit down and talk about the latest news for the UK, US, and other regions. Also, they inform us that Will Dean will NOT be coming back.

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Tough Mudder U.K. “Back To Work”

Tough Mudder London West

We just received word from former Tough Mudder CEO Kyle McLaughlin that the Tough Mudder Europe team are back to work and are “restarting our engines over here”. He told us “We’ve resumed activity and operations and are aiming to have Europe ticket sales back online mid-week”. It appears that the 2020 Tough Mudder UK calendar will be completed in full, with the first Tough Mudder 5K happening on April 17-18 and the first Classic distance event taking place 40 miles west of London on May 9-10, 2020.

We reached out to Spartan CEO, Joe Desena who’s team have been working on the purchase of Tough Mudder. He told us “We have been leaning in for months and our goal is to have ticket sales up this week in Europe.  We are hoping to quickly see this happen globally in the coming weeks. We leave no athletes behind!”

Kyle also sent us a press release which describes the legal process currently taking place in the UK, which is allowing all of this to happen.

You can read it in full, below.

Update: 12:15PM EST – Video interview with Kyles and Giles

Michael Solomons and Andrew Pear of BM Advisory LLP, the specialist restructuring, recovery and insolvency firm, were appointed as Joint Administrators of Tough Mudder Ltd on 24 January 2020. The Administrators are continuing to trade the business with a view to selling the business and assets, including its wholly owned German subsidiary, Tough Mudder GmbH, as a going concern.

Spartan Race has generously supported Tough Mudder’s administration process with the necessary funding required to resume trading. The Joint Administrators have engaged both Giles Chater and Kyle McLaughlin, formerly of the Tough Mudder Ltd management team, to support the business going forward whilst a sale is achieved. Under the Administrators, ticket sales are planned to re-open mid-week and the Tough Mudder team returned to work today.

Michael Solomons of BM Advisory commented: “Tough Mudder has a very strong brand and presence in the obstacle race industry. I am confident that a sale of the business will be achieved shortly and envisage that a purchaser will move forward with plans to deliver all existing events in the 2020 European calendar.”

Similar proceedings are underway in Tough Mudder’s US and Canadian entities. Events in other countries are not currently impacted.

Parties interested in purchasing the business and assets of Tough Mudder Ltd should contact Bryn Carroll of Gordon Brothers on 020 7647 5141 or bcarroll@gordonbrothers.com.

Stay up to date with all of the Tough Mudder news, and how we got to this point here.

Court Moving Quickly On Next Steps In Tough Mudder Case

Tough Mudder Photo

This afternoon, Judge Sontchi filed an “Order Directing The Appointment Of A Chapter 11 Trustee” in the Tough Mudder bankruptcy case.  This filing states :

  • The Motion is granted; and it is further ORDERED, that the United States Trustee shall promptly appoint a Chapter 11 Trustee in the captioned involuntary chapter 11 cases.
  • ORDERED, that the Chapter 11 Trustee shall manage the operations of the Alleged Debtors and develop a restructuring or sale strategy, whichever is in the best interests of the creditors of the Alleged Debtors.
  • ORDERED, that the Chapter 11 Trustee may negotiate a sale of the Alleged Debtors’ assets, subject to Court approval and higher and better offers.

The first scheduled court date is scheduled for this Friday the 24th. However, the judge can and did decide to move forward ahead of time because all parties in the case (Tough Mudder, Spartan, Active, and the creditors) are aligned.

What happens next is a Trustee will be chosen by a pool of candidates in the next 24-48 hours.

From there, the Trustee will begin to work with all parties to guide the parties through the Chapter 11 process. What we in the community hope is that The Trustee will find a way to re-open the doors and put tickets back on sale.

One thing to note is that Tough Mudder Inc operates Tough Mudder in the US, and owns subsidiaries that operate in the UK, Germany and Canada, so progress may happen on different timelines in each region.

Read the most recent articles, and how we got to this point here.

 

First Court Date Set In Tough Mudder Bankruptcy Case

Tough Mudder Bankruptcy Case

We finally have the first date on the judicial calendar for the Tough Mudder Chapter 11 Bankruptcy case.  Chief Judge Christopher S. Sontchi will hear from the parties at a status hearing on Friday, January 24th. The creditors and Joe Desena had hopes to be heard as soon as this week, but were unable to speed up the process.

One of the reasons for the delay could be the Borden Dairy bankruptcy proceedings, which is also being heard in Judge Sontchi’s court.

We will keep you posted with the most up to date information as we cover this industry changing story.

Read the most recent articles, and how we got to this point here.

Will Dean Concedes To Bankruptcy Process – Kyle McLaughlin And Creditors Hopeful For Faster Resolution

Spartan and Tough Mudder Kyle Mclayghlin Joe Desena

This morning Will Dean filed a Notice of Consent To Order For Relief And Appointment of a Chapter 11 Trustee. The motion states that he  “…will cooperate with the trustee to preserve value for the creditors” and that the Board “consents to a sale of the business to Spartan Race Holdings. Inc., via a court approved order.”  This essentially means that Mr. Dean will not fight the recent filings of debtors against Tough Mudder.

Will Dean and the debtors believe this motion removes obstacles which will speed up the process towards a Chapter 11 bankruptcy. This type of bankruptcy will allow Tough Mudder begin to pay debtors, and reopen Tough Mudder for business.

Will told us in an exclusive statement “I am very pleased that we have brought this matter to resolution. I wish Kyle and Joe all the best and am very pleased that the Tough Mudder brand and community will live on. I appreciate it has been a stressful time for all – not least the TMHQ team who I acknowledge have been put through a great deal. I am looking forward to turning my attention back to my new venture and wife and family.”

 

Obstacle Racing Media reached out to Kyle McLaughlin who told us: “Seeing Tough Mudder consent to the bankruptcy process is an encouraging sign, and in my view, an acknowledgment from Will Dean that the community’s voice has been heard: people want to see Tough Mudder continue on, and support the Spartan merger. — With the court’s support, hopefully Tough Mudder will be able to quickly facilitate a return to normal operations. I’ve been blown away by the strength and support of the Tough Mudder and wider OCR communities rallying to support a positive outcome for TM, and assuming Tough Mudder can clear the remaining obstacles in front of it— I think it’ll be back stronger than ever before”

Spartan CEO Joe Desena added that he “has been super impressed with Kyle’s hard work and the community standing with us through all of the legal proceedings.”

We also reached out to a spokesman for the creditors who had “many conversations with Will Dean. The man did the right thing, he apologized, and said he never thought it would go to this.  He really didn’t realize how hurtful is actions were.”

There has already been a petition filed to speed up the normal 21 day process to have a Trustee assigned. All parties involved are hoping the court moves fast to choose a Trustee, and with all parties in agreement, can move toward a sale which will put the company essentially in Joe Desena’s hands. Joe has stated his immediate goal is to “Put Kyle back in charge and get everyone back to work as soon as possible”

Joe Desena and Kyle McLaughlin plan to release a social media post later today with an update.

Will Dean Signs Letter Of Consent

Read the most recent articles, and how we got to this point here.

 

Tough Mudder Update – Involuntary Bankruptcy Petition Filed

After a few days of eerie silence on the Tough Mudder front, we have an update.

A quick recap: 4 days ago, Kyle McLaughlin announced had stepped down from his role as CEO of Tough Mudder as of December 30th. Tough Mudder founders Will Dean and Guy Livingstone denied this on a recent podcast, and assured listeners and viewers that “everyone will be back to work on January 2nd”. On the 2nd, we were able to confirm that no staff were present at the Tough Mudder Headquarters in Brooklyn, NY.

This morning in Delaware, three vendors filed a Chapter 11 Bankruptcy Petition against Tough Mudder for monies owed. Valley Builders, Trademarc Associates,  and David Watkins Homes are due a total of $854,558.40. It is our understanding that at least one of these vendors has been building Tough Mudder courses for at least 7 years.

Chapter 11 Bankruptcy does not mean the immediate demise for Tough Mudder. This type of bankruptcy is “a restructuring bankruptcy”. A judge is assigned and begins to assess the terms of the filing. The court then gets to decide who gets paid, and in what order, and the overall future of the company. Airlines have done this historically, as well as many retail brands, which may close several locations in the process, but ultimately stay open for business.

In OCR, we have a very specific circumstance which may keep Tough Mudder alive. That circumstance is Joe Desena and Spartan Race.

Joe Desena told us “We made an offer that was signed by (then President and CEO) Kyle McLaughlin that gave Will and Guy a large payment, got the creditors paid, and kept everyone at Tough Mudder at work. This was before the two equity holders (Will and Guy) decided this was not good enough, and would only approve of the deal if there were able to enrich themselves even more” When asked for disclosure of the amounts offered to Will and Guy, Joe told us ”Let’s say at least 20X the average American salary”

We also asked Joe why he would want to keep his long time rival Tough Mudder in business. “In the early days of this industry, I wanted to kill them” he said. “No one wanted them gone more than me. All I thought about was beating those guys. Now it makes much more sense for us to keep both brands around. Tough Mudder have a healthy business and there is minimal overlap in our customer base. It’s better for the industry.

He went on to tell us that “We have been working hard to keep it OUT of bankruptcy, and were almost there until those two idiots told everyone to essentially  F*ck off , unless we get paid more!

When asked about Active’s possible involvement Joe told us “After lending all the money they have to keep TM alive over the last few years, Active decided a few weeks ago after being insulted, yelled at, threatened, and tortured – that they were not going to play along with these terrorist tactics of Will Dean”

We asked Joe what’s the best outcome for this recent filing. He told us “If the courts move fast and Will and Guy get out of the way, we may be able to save it. We’d love to fire back up registrations and then hire back Kyle and his team to run things. However, I understand people need to find jobs while things are being determined in the courts, so it may not be possible.”

We also reached out Kyle McLaughlin, who prior to stepping down, had access to Tough Mudder’s financials.  He told us “I’m most concerned for the TMHQ team right now — from what I understand they aren’t back to work yet and have been told they may not be paid. I’m still hopeful that there can be a positive resolution of this dispute— there seems to be multiple paths available that save the jobs, pay the vendors and ensure all of the 2020 events happen on schedule”.

We have been reaching out to Will Dean for several days. Our last communication from Will was on January 2nd via email when in response asking for clarity around a topic said “Not as confused as I was when I read your article. Who are your sources? They need shooting… Seriously”

**January 7, 2:40 PM Update – Gary Brewer of TradeMarc Associates told us “We as contractors for Tough Mudder for more than 7 years has always been, and still are, totally devoted to keep Tough Mudder alive and profitable, and get sales reopened soon.”

Read most recent articles, and how we got to this point here.