Not Quite Hawg Heaven
Several creditors and legal actions face the proprietors of what was once called Hawg Heaven.
By John G. Edwards
Review-Journal
Sunday, July 19, 1998
About a year ago, Jeff Bruce thought he was buying a Harley-Davidson motorcycle from a Henderson dealer called Hawg Heaven.
Bruce said he later learned it wasn't a Harley. That was the least of his problems.
The manufacturer kept the $20,000 motorcycle when he sent it in for repairs, Bruce said.
Ultra Custom Biker's Dream Corp. of Riverside, Calif., said a Henderson dealer hadn't paid it for inventory financing, according to Bruce. The California motorcycle manufacturer told him, Bruce said, that it owned the cycle, not Bruce.
"I didn't believe it that anybody could do this to somebody," Bruce said. "This is unheard of, I think."
Scott Burke, the Henderson motorcycle dealer who sold the vehicle to Bruce, said he paid for the bike. Burke said Henderson police have a copy of a canceled check he used to pay a lender who financed the cycle while it was in his dealership inventory.
Burke said Ultra Custom never sent him a title for any of the 10 Ultra Custom cycles he sold between April and October 1997.
Bruce said he is frustrated, not just with the manufacturer and Burke's dealership, but with law enforcement and regulatory officials.
Bruce said he has complained to Henderson police, the fraud unit of Las Vegas Metropolitan Police, police in California, the Nevada Consumer Affairs Department, the FBI and Nevada Department of Motor Vehicles. But he is getting cynical about the effectiveness of Nevada public officials responsible for enforcing regulations and laws.
"I'm discouraged with it," Bruce said.
"We couldn't figure out why they haven't revoked (Burke's) license," said Steven "Staz" De Stout, president of Staz's Nevada Indian. He is another Henderson motorcycle dealer and a competitor of Burke's.
"The way in which (Burke's dealership) has conducted itself in this market is bad for the industry as a whole," De Stout said.
Hawg Heaven, in fact, in December filed for Chapter 11 bankruptcy, which gave it temporary protection from creditors and allowed it to continue operations. It reported $331,000 in liabilities and $66,500 in assets. Hawg Heaven recorded $3 million in income in 1997, according to a document filed in bankruptcy court.
The company and Burke face other legal challenges as well. Henderson police are investigating Burke, according to a bankruptcy court document filed by First Acceptance Corp., a creditor of Hawg Heaven. Timothy Cory, Burke's bankruptcy attorney, said Henderson police seized most of the financial books and records at Hawg Heaven.
Since filing for bankruptcy, Hawg Heaven has sold its assets. The $66,000 in proceeds from the sale are earmarked to go to First Acceptance Corp., a local company that loaned money to Hawg Heaven for motorcycle inventory.
Bankruptcy Court Judge Robert Clive Jones on Tuesday dismissed the Chapter 11 bankruptcy with the understanding the $66,000 will be paid to First Acceptance.
Georgeanne Bradley, an attorney representing First Acceptance, said the company intends to trace the paper trail of money and motorcycles at Hawg Heaven. First Acceptance and other lenders have the legal option of filing a state court lawsuit against Hawg Heaven and Burke, she said.
First Acceptance claimed Hawg Heaven at one point owed it $389,402 because Hawg Heaven sold motorcycles without repaying First Acceptance for inventory loans, as agreed.
The lender said it recovered $130,000 but was still owed $259,000. The $66,000 it expects to receive with the bankruptcy dismissal will reduce the sum.
Other creditors that loaned money to Burke for financing motorcycle inventory include Green Tree Finance of St. Paul, Minn., Transamerica Financial Corp. of Rolling Meadows, Ill., and Nevada Federal Credit Union. They walked away from bankruptcy court with nothing from the sale of assets.
The company that leases retail space to Burke's dealership in Henderson wasn't paid any rent while Hawg Heaven was operating under Chapter 11 protection from creditors, Scott Fleming, the landlord's attorney, told Judge Jones.
Yet another creditor is manufacturer Harley-Davidson Motor Co., which sued Hawg Heaven over allegations of trademark infringement.
Burke said he does business now as Titan Motorcycle Co. of Las Vegas. He said he obtains motorcycles on consignment from the manufacturer, Titan Motorcycle Co. of America.
Vegas Motorcycle Co., which bought Hawg Heaven's assets, has one of the same officers as the Titan manufacturing company. Patrick Keery of Scottsdale, Ariz., is president of Titan Motorcycle of Reno and is an executive with Vegas Motorcycle.
Some in the industry question why the Nevada Department of Motor Vehicles has not acted. Bruce filed a complaint with the DMV registration division in December.
Kevin Malone, a public information officer for the DMV, said the state agency has an ongoing investigation and can't comment.
Malone, however, confirmed that the DMV hasn't taken any action to revoke or cancel Burke's license. Burke is listed as the principal owner of Biker Heaven in Henderson.
Yet, the sign outside the dealership says Titan Motorcycles Co. of Las Vegas. "There's no separate license for Titan of Las Vegas or any kind of variation of that name," Malone added.
A letter written by Cory indicated that Burke was an employee of a new Titan motorcycle dealership. Burke disputed that. He said he sells Titan motorcycles on consignment from the manufacturer.
Transamerica Financial Corp., meanwhile, has a federal lawsuit pending against Hawg Heaven.
Transamerica filed the lawsuit in January, seeking a judgment for $272,000 plus interest for repayment of loans it made to Hawg Heaven for inventory. Defendants in the Transamerica suit included Burke and his wife, Roxanne, and another couple said to be involved in the dealership.
That couple, Douglas and Marilyn Barber, filed a cross-claim against the Burkes and Hawg Heaven. In the cross-claim, Nikolas Mastrangelo, an attorney for the Barbers, alleged the Burkes misappropriated corporate funds, obtained duplicate documents for financing identical motorcycles and prepared fraudulent or false sales documents for sales that never occurred. The Burkes denied those allegations through their attorney.
Mastrangelo's cross-claim said that Doug Barber paid $50,000 for a 45 percent interest in the dealership, but Barber never received a stock certificate.
The Burkes agreed that he never received a stock certificate but contended the Barbers participated in the founding of Hawg Heaven and the company's management decisions. A document filed by Burke indicates Barber was a director of Hawg Heaven for one month.
Both the Barbers and the Burkes guaranteed the unpaid Transamerica loan, according to Transamerica lawyers.
Bruce, the first-time motorcycle buyer, employed an attorney for a while but was unsatisfied. He pursued his own investigation, using the Internet to search out information about the Burkes.
He has little to show for his work, except for sour memories and an expensive education.
Bruce remembers telling Burke that he wanted a Harley. Burke sold him the Ultra Custom, instead.
" `It's the same thing,' " Burke told him, Bruce recalled. " `It's identical to a (Harley) Fat Boy, but it's just customized more.' "
Concluded Bruce: "I come out with an Ultra Custom Cruiser, because I was a first-time bike buyer. I had no idea there was a difference."
He wasn't the only one who didn't recognize the difference, according to a lawsuit filed last year. Impressionist Danny Gans, who performs at the Rio Suite Hotel, filed a lawsuit in July 1997, complaining he paid Burke $17,700 for what he thought was a Harley. At the time, Burke said he also thought the cycle he sold Gans was a Harley. Gans is a plaintiff in the pending lawsuit filed by Harley-Davidson against Hawg Heaven for alleged trademark infringement.
Bruce has no motorcycle at all. He does have a debt to IBEW Credit Union, which financed the $20,000 purchase for him. He didn't even enjoy it much, because of numerous repair problems, he said.
Burke agreed that the bike had problems.
Bruce said Burke stopped being friendly during a bankruptcy court hearing.
At first, Burke "was still trying to snowball me," Bruce said. Bruce remembers that Burke then became sarcastic and said, "Well, Jeff, good luck.'" |
