Sadly, with the apparent demise of Completely Motorbikes, some people have been left in the lurch. Having paid for their next motorcycle, even if just a deposit, they are now facing locked doors and a closed business.
Several discussions are running on why this has happened, but if you are one of the people facing these problems, how you resolve things matters more than how Completely Motorbikes got into this mess.
Important to Note
I’m a journalist, and therefore, the last person you should listen to. I write about motorcycles.
What follows is commentary based on my research. The best course of action in these situations is to talk to someone legally trained. Tell them everything, the good and the bad. Leave nothing out and follow their advice.
That said, here are some things you may wish to consider.
The Credit Trap
Most businesses live on some form of credit. Whether that is a motorcycle manufacturer who supplies bikes but gives the dealer 90 days credit before they have to pay for them or a bank that lends the dealer money to buy motorcycles, they are all forms of credit.
Regardless of what forms of credit the dealer is using, they all have one thing in common … eventually, the creditor (the person who made the “loan”) wants their money back.
Sometimes, all that has to happen is that the interest on the debt is paid, and the lender (creditor) will continue to let the dealer owe them money.
This is typical of banks, who want the dealer to borrow money but also want a fee (interest) from the dealer for using their money. It is the same principle as taking out a loan—you pay interest—just that the loan doesn’t have a fixed repayment plan.
Going into Administration
This isn’t the same as going bankrupt. (Ref: Business Advice)
The dealer isn’t selling enough bikes to cover its debts. The creditors threaten legal action to collect what they are owed, so the business owners put the company into Administration.
This formal insolvency process allows the business—the dealership—time to get its affairs in order. While in administration, creditors can’t take action against the company that owes them money.
By going into administration, an insolvency practitioner is appointed, whose job is to rescue the company or achieve the best outcome for the creditors. Restructuring, selling the company as a whole or selling off the assets are all possibilities.
Am I a Creditor?
What do you do if you bought and paid for a motorcycle, but the bike is still in one of the Completely Motorbikes dealerships?
Essentially, you are a creditor. You have given money to the company, and they are holding an asset (the bike). Not being legally trained, I can’t tell you if this makes you a secured, preferred or unsecured creditor, but you are (I hope) owed something.
Your status as a creditor is a crucial point to clarify. If you can, you want to be a secured creditor because these people are paid or get their assets first.
There would appear to be a good case for being a secured creditor here, as you bought a specific asset the administrator is now holding, but again, what do I know—I’m a journalist.
Unsecured creditors may receive a proportion of the money owed or none at all. They are the last to be paid, and their money comes from what is left after secured and preferred creditors’ debts are settled.
Take legal advice to determine what type of creditor you are. The Citizen’s Advice Bureau is a good place to start. Their advice—given by a solicitor—is often free (up to a point).
Once you know the type of creditor you are, contact the Administrator and state your claim.
Sifting through the paperwork of a large motorcycle chain will take time, and the administrators don’t do this for free. They are on the clock and getting paid from the money they can extract from the ashes of Completely Motorbikes.
The faster everything is settled, the less the administrators will cost, and the more money will be left to pay the unsecured creditors.
Loans
If you borrowed money to buy the bike, you need to talk to someone legally trained to work out what to do, as this adds another layer of complexity to the equation.
For example, if you took out an unsecured personal loan to buy the bike, the fact that you purchased a motorcycle may not be relevant. What you spent the personal loan money on is your business.
Personal Contract Plan (PCP) is a different form of financing. Generally speaking, you never own the bike unless you decide to pay off the outstanding balance. If you have signed a PCP agreement but have not received the bike, a solicitor should hopefully be able to work that out for you quite quickly.
Hire Purchase appears to be the most complicated finance issue. Assuming this is a loan secured against the bike, there would appear to be some argument over who should approach the Administrator. Then, there is the small print in the HP agreement to consider.
Locked In
If your motorcycle is in the workshop, you want it back. The bike isn’t an asset belonging to Completely Motorbikes unless they have installed parts you haven’t paid for. For example, the oil in the engine could belong to Completely Motorbikes, but you own the rest of the bike.
After you have proven to the administrator that it is your bike, you will have to pay any money due, and then, hopefully, you can get your bike back.
There are cases where this has happened quite quickly. If I followed the case notes correctly, it had something to do with the administrator not wanting the liability for securing your motorcycle.
Completely Motorbikes
I don’t know the details of how Completely Motorbikes collapsed, but having bought a bike from them at the start of the year, I have my own thoughts on their business model.
I bought a very low-mileage second-hand Honda from Completely Motorbikes and paid about £500 less than a new one would have cost me. Bonkers, right? Well, sort of.
Completely Motorbikes offered me a thousand pounds more for my trade-in than any other dealer. Therefore, the money I had to add was £1,000 less than I needed against the new Honda, plus the new Honda was £500 more.
To put numbers on it, the second-hand Honda cost me £11,500, which I paid by getting £5,500 for the trade-in plus £6,000 cash.
The new Honda would have cost £12,000, which I would have paid by getting £4,500 trade-in plus £7,500 cash. So, I opted to “save” £1,500.
The problem comes when I sell my second-hand Honda. I’ve paid too much for it, and on paper, I will take a significant loss unless I go back to Completely Motorbikes, and they offer me £1,000 more than anyone else. Of course, I would have needed to buy one of their overpriced second-hand motorcycles to get the higher trade-in price.
It is a clever plan with only one hole in it – competition. The day after I’d done the deal with Completely Motorbikes, my local Honda dealer called and offered to match the trade-in price.
They knew what Completely Motorbikes was offering as a trade-in price but had been too slow to get back to me with an updated offer.
A bit too late, the Honda Dealer had decided to offer me an outrageous discount to shift another new bike in February. The only caveat was I couldn’t have one in the latest colours.
In the end, I wasn’t overly disappointed. All the losses and savings are meaningless until I come to sell the Honda, and I would have “lost” £1,500 on the new bike as soon as I rode it out of the showroom, anyway.
Bottom Line
Completely Motorbikes aren’t alone. A few years ago, I met a lady in Wales who had been the Area Manager of another large multi-site second-hand motorcycle dealership. She told me stories about the bank calling on Friday afternoon and giving the dealership until Monday to deposit a large chunk of cash, or they were calling in the debt.
Throughout those weekends, the dealership would do any deal that made money. Had they failed to make the required deposit, who knows what might have happened?
It seems that the best way to avoid getting caught is to not pay in full for your motorcycle until you are riding it out of the showroom.
When paying a deposit, always use a credit card. If the dealer won’t accept a credit card payment, walk… no, run… away.
If you are caught in one of these situations, the best approach is to fight fire with fire. Get legal advice on your status as a creditor and contact the administrator to make your claim.
Don’t wait for it to sort itself out. Go on the offensive.
Update From A Solicitor
Mark Robinson is a Partner in the Serious Injury Department in Manchester and specialises in motorcycle accident claims of the utmost severity and complexity.
He understands that motorcyclists remain one of the most vulnerable road users and the effects of an accident are a genuine concern for the motorcyclist and their loved ones.
Mark has assisted clients with life changing injuries including brain and spinal injuries, severe orthopaedic injuries and amputations.
Solicitor Mark Robinson contacted us, to kindly highlight a few of the areas where, because I’m not legally trained, I’d wandered off track.
As always, this advice is generic and may not apply in your specific case. Engaging a solicitor is the only way to get accurate legal advice for your specific case.
Mark Robinson
If you purchased a bike from a company that is now in administration, it would be useful to contact the appointed insolvency practitioners and advise them that you are still awaiting delivery.
You will need to make them aware that you are an unsecured creditor (all consumers are).
For any online orders where you have paid by credit card, you will have the additional benefit of making a Section 75 claim under the Consumer Credit Act.
This is a form of legal protection, so whatever rights you had with Completely Motorbikes, you have with your credit card company. This means you can get your money back. It would be advisable to contact your bank/credit card provider as soon as possible to notify them of the situation, as you must do this within 120 days.
The main difference between secured and unsecured creditors is the order in which they receive monies from a company in administration. As the name suggests, secured creditors have some form of ‘security’ over the company. They are among the first to receive payment and generally include banks, mortgage companies, or lenders who have a fixed or floating charge over the company.
Unsecured creditors do not have the same protection and include HMRC, suppliers, contractors and, sadly, consumers.
Unsecured creditors are the last to be paid and it’s often the case that they are paid very little or never paid at all.
Preferred creditors are effectively unsecured creditors who are given some priority during the administration process. These are usually paid after secured creditors and include people such as employees or individuals who have brought a civil claim against the company.
Unfortunately, consumers are not preferred creditors and remain unsecured creditors throughout any insolvency proceedings.
If Completely Motorbikes has your bike, the first step would be to contact the insolvency practitioners explaining the situation, as you are legally entitled to have your bike returned.
It would be advisable to write to the insolvency practitioners with details of your bike and provide them with a copy of your V5C as proof of ownership.
The earlier you do this the better as you do not want your bike to form part of the company’s assets which would happen in the event, they have installed parts which you have not paid for.
Helpful next actions
Contact the Joint Administrators who are Azets Holdings Limited, 5th Floor, Ship Canal House, 98 King Street, Manchester, M2 4WU. You will need to advise them of your status as an unsecured creditor and provide them with a brief explanation of what has happened to you as a consumer.
Contact your credit card company in the event you made payment using a credit card to seek repayment.
Seek appropriate legal advice should you require any further assistance.
One Response
I brought a motorbike from completely motorbikes plus a 4 year service by bank transfer paid in full,can i claim my money back for the 4 year service i paid for