Bankruptcy, Purchase, and Resumption of Production
The German company Ernst Paul Lehmann filed for bankruptcy in late 2006, only a few short months after LGB of America (LGBoA) was spun off into its own company. LGBoA was one of the companies that bid on the purchase of Lehmann's remaining assets, but lost to Märklin, another German model train manufacturer. Shipping and production resumed in fall 2007, with the LGB brand intact. On September 21, 2007, an interim agreement concerning already-manufactured product was signed between LGBoA and Märklin that gave LGBoA exclusive distribution and service rights in North America. However, a new contract was never signed. Since LGBoA owned the LGB trademark in the United States, new LGB products could not be distributed there without some sort of agreement between LGBoA and Märklin. Meanwhile, Märklin had been distributing new products to the rest of the world.
On June 1, 2008, Silvergate Distributors, Inc. was formed as a new company by LGB of America president Anthony Castellano. Silvergate is an independent, American-owned, hobby distributor and is not a subsidiary or "daughter firm" of any other company. Though LGBoA was not dissolved, Silvergate assumed distribution of remaining LGB stock as well as current and new product lines. Silvergate appears to be diversifying as it has now acquired distribution of the Schuco line and is expanding with Brawa and Piko as its current model railroad product lines.
In November 2008, Märklin announced that it had resolved the American trademark dispute and planned to resume distribution of LGB products in the United States starting tentatively in January 2009, as well as update the LGB websites and release a 2008/2009 catalog. Märklin announced that distribution to the North American market will be through Walthers. This arrangement has not been greatly affected by Märklin's early 2009 insolvency. As of April 2009, a select few LGB products can be ordered at the Walthers website, with more arriving soon.
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