As a result, during the Preference Period, lenders were monitoring Debtors’ borrowing base and periodically sweeping cash from the Debtors’ operating accounts. Additionally, Debtors’ sales, inventory levels, and accounts receivable all had decreased markedly during 1992, further restricting Debtors’ borrowing base and their access to financing. All of these factors left the Debtors’ during the Preference Period with insufficient schwinn ebike cash to pay their vendors’ outstanding invoices or with which to acquire new shipments of product. By 1990, other United States bicycle companies with reputations for excellence in design such as Trek, Specialized, and Cannondale had cut further into Schwinn’s market. Unable to produce bicycles in the United States at a competitive cost, by the end of 1991 Schwinn was sourcing its bicycles from overseas manufacturers.
Eventually, the market for adult bicycles grew smaller as cars became more affordable. Arnold sold his share of the company to Schwinn, who realized the importance of manufacturing and marketing bicycles for children. With lower prices possible due to advances in manufacturing, the market for children’s bicycles began to grow. The 26 x 1.75 size is the normal I.S.O. 559 mm size used on most mountain bikes; the 26 x 1 3/4 (I.S.O. 571 mm) is not interchangeable with any normal tire of similar width, although its bead circumference is the same as the “650C” size used on some high performance 26″ wheel bicycles.
Using the standard electro-forged cantilever frame, and fitted with five-speed derailleur gears and knobby tires, the Klunker 5 was never heavily marketed, and was not even listed in the Schwinn product catalog. Unlike its progenitors, the Klunker proved incapable of withstanding hard off-road use, and after an unsuccessful attempt to reintroduce the model as the Spitfire 5, it was dropped from production. A growing number of US teens and young adults were purchasing imported European sport racing or sport touring bicycles, many fitted with multiple derailleur-shifted gears.
According to Thorholm, the payments were sent to Defendant because he understood that Defendant would not ship product to the Debtors unless they made payments on outstanding invoices. With regard to Defendant’s asserted ordinary course of business defense, the evidence to be considered starts with earlier Findings in the Common Issues Opinion. There it was found that Debtors were not operating in the Preference Period as they had previously because of their poor financial situation. Debtors experienced a severe cash crisis during the preference period and were unable to pay their payables as they came due in the ordinary course. Debtors had violated certain debt covenants in their loan agreements with their banks in early 1992.
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