Three contractors have asked a Delaware Bankruptcy Judge to put Tough Mudder, LLC into Chapter 11 bankruptcy. Tough Mudder is known for organizing notoriously difficult obstacle courses that have attracted athletes in search of alternatives to traditional road races. The concerned creditors cited signs of the company’s financial distress and expressed their fear that they will lose over $855,000 they say they are owed for work performed on the extreme race organizer’s obstacle courses over the last five years.
Additionally, the involuntary petition cites the lawsuit filed in February 2019 by one of Tough Mudder’s founders, Guy Livingstone, alleging the company’s failure to pay him $3 million it owes him on a promissory note. Livingtsone’s Complaint alleged that when Livingstone ended his active involvement with the company in 2013, the company failed to post a profit since 2015.
A report from Bloomberg indicated other evidence of financial distress including the departure of Tough Mudder’s CEO Kyle McLaughlin in December 2019, cancellation of scheduled events, and the suspension of ticket sales on its website. Tough Mudder competitor, Spartan Races, is in talks to acquire some the allegedly troubled event company’s assets in the U.K. Canada, Germany, and the United States. The involuntary Chapter 11 petition seeks to appoint a trustee to oversee the company amidst the uncertainty surrounding the company’s financial condition and the potential acquisition by Spartan.
Tough Mudder Creditors Try to Put Race Company in Bankruptcy
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