Elio’s $4,484,755.50 Catch-up Payment

[TexasTesla]

I’m curious how Elio Motors handled this recent “Catch-Up Payment”.

Elio’s last SEC filling indicated they had little or no cash.

“Catch-Up Payment. On or before October 10, 2018, Elio shall pay to RACER $4,484,755.50, which is the sum of the unpaid monthly amounts and late fees due to RACER under the Note (from October 2016 to October 2018) plus the sum of the forbearance fees due to RACER via this forbearance agreement and all prior forbearance agreements executed between Elio and RACER. The monthly payment and late charge portions of the Catch-Up Payment shall be applied to accrued interest due under the Note.”

 

[TexasTesla]

It appears declaring chapter 7 or chapter 11 will not protect Elio Motors from default to RACERS TRUST.


“Forbearance Termination and Default. On or after October 31, 2018, RACER shall be free to commence any action or proceeding against Elio or the Collateral and to otherwise enforce all of its rights and remedies under the Note and Loan Documents. Furthermore, if (i) Elio shall default in any of its obligations under this Agreement including without limitation, the payments required pursuant to paragraph 4, above, or (ii) a petition in bankruptcy or other insolvency proceeding is filed by or against Elio, or (iii) any event of default set forth in the Loan Documents, PSA or under applicable law (other than the Existing Defaults) shall occur prior to the Forbearance Termination Date, or (iv) CH Capital or any other person or entity seeks to enforce rights or remedies against the Collateral or any of Elio’s property or assets, or (v) Elio breaches any representations, warranties and covenants set forth in this Agreement, the PSA or any Loan Document, or (vi) any liens, other than those currently held by CH Capital attach to or are asserted against the Collateral or any other assets of Elio, or (vii) Elio defaults under the CH Loan, or (viii) a judgment is entered against Elio; ((i) – (viii) are collectively, the “Forbearance Defaults” and individually a “Forbearance Default”), then, in any such event, RACER’s agreement of forbearance hereunder shall automatically terminate and RACER shall have the right to commence any action or proceeding and take all enforcement actions against Elio and the Collateral and to otherwise pursue any and all rights and remedies under the Loan Documents. Additionally, upon the Forbearance Termination Date or a Forbearance Default, all sums due under the Loan Documents shall immediately become due and payable.”

 

[booboo]

Good Topic. Thank You T.T.
https://en.wikipedia.org/wiki/RACER_Trust

 

[TexasTesla]

Here’s more recent payment deadlines imposed on Elio Motors.

Racer Trust

On August 1, 2018, the Company entered into an additional amendment to the promissory note, which deferred payment of the note for a period of an additional five months, such that the entire balance of principal and interest shall be due in full on December 31, 2018.

CH Capital Lending

On November 7, 2018, the Company entered into the third amendment to the second loan extension, which exctended the maturity date of the note until March 15, 2019.

Shreveport Business Park

On November 7, 2018, the Company entered into the fifth amendment to the lease agreement. The terms of the new agreement deferred the monthly lease and lease related charges through December 14, 2018, at which time the Company has agreed to an additional payment of $2,530,656. The agreement stipulates that monthly payments shall begin on January 1, 2019.

 

[TexasTesla]

Additional recent Elio Motors SEC filling’s.

How could Elio’s Board of Directors allow this financial mismanagement to occur. Where was the proper oversight by competent directors?

“As of the Effective Date, Elio is indebted to RACER under the Loan Documents for an amount no less than $21,126,147, plus unpaid interest, late charges, forebearance fees, and attorneys’ fees, of $15,729,830...”

“As of the Effective Date, Elio has failed to pay to RACER in full the October 2016, November 2016, December 2016, January 2017, February 2017, March 2017, April 2017, May 2017, June 2017, July 2017, August 2017, September 2017, October 2017, November 2017, December 2017, January 2018, February 2018, March 2018, April 2018, May 2018, June 2018, and July 2018 monthly payments due under the Note, and Elio anticipates that it will fail to pay to RACER in full the August 2018, September 2018, and October 2018 monthly payments due under the Note (collectively, the “Existing Defaults”).”

 

[RSchneider]

Additional recent Elio Motors SEC filling’s.

How could Elio’s Board of Directors allow this financial mismanagement to occur. Where was the proper oversight by competent directors?

“As of the Effective Date, Elio is indebted to RACER under the Loan Documents for an amount no less than $21,126,147, plus unpaid interest, late charges, forebearance fees, and attorneys’ fees, of $15,729,830...”

“As of the Effective Date, Elio has failed to pay to RACER in full the October 2016, November 2016, December 2016, January 2017, February 2017, March 2017, April 2017, May 2017, June 2017, July 2017, August 2017, September 2017, October 2017, November 2017, December 2017, January 2018, February 2018, March 2018, April 2018, May 2018, June 2018, and July 2018 monthly payments due under the Note, and Elio anticipates that it will fail to pay to RACER in full the August 2018, September 2018, and October 2018 monthly payments due under the Note (collectively, the “Existing Defaults”).”

This is not financial mismanagement at all. Stu is on the board and he is part of Racer Trust, CH Capital and SBP. So he can just keep putting off the payments as long as he wants. He is the one we all should be praising because he's keeping Elio in business. If it wasn't for him, they would have closed the doors at the end of 2016.

Stu didn't get rich by accident. He's a shrewd businessman. In the end, he wins no matter what happens to Elio.

Elio goes bankrupt, he gets paid first and get's back the building and equipment. Sell the equipment for ten cents on the dollar and then bulldoze the building down. After that, build a new warehouse and turn it into a distribution center.

Elio gets a big investor via Eliocoin, Stu and his companies get paid up and then keep drawing lease and loan payments. If Elio can't get to 1500 workers, then he gets even more monthly payments. In addition to that, his stock that he has skyrockets and he sells part of it to even make more money.

We should give Stu a big high five for him keeping the dream going.

 

[Rickb]

Praise and a high five? Perhaps had he provided his experienced shrewd business leadership, management, and financial expertise as a member of EM’s BOD. Seems to be a somewhat conflicting win win for Stu regardless.

 

[RSchneider]

Praise and a high five? Perhaps had he provided his experienced business leadership, management, and financial expertise as a member of EM’s BOD.
View attachment 23407

Would you want someone who's specialty is in real estate to be telling a car company what to do? All Stu cares about is getting his money and he will, no matter what. He gifted Paul the place to work out of and it was up to Paul to figure it out. Plus he's bent over backwards to keep Elio from going under. That's enough out of Stu because he does have other things to do and those involve his specialty (real estate).

 

[TexasTesla]

Stu didn't get rich by accident. He's a shrewd businessman. In the end, he wins no matter what happens to Elio.
We should give Stu a big high five for him keeping the dream going.

Stu is currently charging Elio Motors a 18% penalty for nonpayment, that makes him an opportunist in my books.

I’m sure all the investors and shareholders of Elio Motors stock would love to give Stu a “big high five”...or not!

Stu has certainly made a healthy contribution to the $100 million debt that Elio Motors is burden with.

Stu is on the Board of Directors of Elio Motors, and thus has a fiduciary responsibility to take care of the Elio shareholders.

He’s left the Elio shareholders out in the cold. Their investments are basically worthless!

I will commend Stu for taking very good care of Stu!

My own personal admiration is for businessmen who get wealthy by using a strong code of ethics!

 

[TexasTesla]

All Stu cares about is getting his money and he will, no matter what. Plus he's bent over backwards to keep Elio from going under.

18% interest is certainly bending over backwards! LOL