Yamaha has filed a lawsuit against the East Coast dealership chain Motorcycles of Manchester, which includes MOMS Middlesex LLC, MOMS Northampton LLC and Wheel Freedom LLC, according to new reporting from Powersport Business, with the lawsuit being filed in both the U.S. District Court for the District of New Hampshire and the District of Maine.
The case revolves around Yamaha alleging that Motorcycles of Manchester is in breach of a 2024 inventory financing contract, which has seen partial payments, nonpayment, and past-due interest payments not being paid. Basically, Motorcycles of Manchester agreed to purchase inventory and financed that inventory through Yamaha, but hasn't paid up or kept up with the interest on the financing.
According to Powersport Business, "The New Hampshire federal docket confirms that Yamaha attached the Feb. 28, 2024, inventory financing agreement to its complaint, along with UCC financing statements, a Sept. 8 notice of payment default and demand for cure, and documentation related to inventory in New Hampshire," adding, "The Maine case includes the same inventory financing agreement and related filings, such as a notice of default and collateral documentation in Maine."
And Yamaha wants $2.8 million for its troubles.
For those who've never worked at a dealership, some, not all, work on leveraging debt to purchase new inventory that they can then sell for a profit and pay off those debts afterward but at better rates than you or I receive through our own banks. It works all right when the economy is good and inventory moves. That all comes crashing down when the economy isn't good, i.e., like right now.
For the most part, powersport sales have been declining in the last two years. High interest rates, low job growth, high tariff price hikes, higher gasoline prices, and more have all contributed to the American dollar being heavily inflated and not having the buying power it once had. That's led many to cut back on frivolous spending, which powersports purchases fall into. So if a dealership agreed to take in inventory with debt to a company like Yamaha and can't sell that inventory, they're stuck holding the bag.
It's hot potato, but for businesses. You never want to be left holding the potato. Which is exactly what Yamaha alleges is going on with Motorcycles of Manchester. The lawsuit was filed only a few weeks ago, so there's no clear end in sight. We'll bring you more information as we get it.
