Hoonigan – the automotive lifestyle brand founded by late internet star and motorsport icon Ken Block – has filed for bankruptcy, having wound up with US$1.2 billion (A$1.8 billion) in debt.
Originally launched in 2010 as a lifestyle and media business by Mr Block and long-time friend Brian Scotto, Hoonigan quickly became synonymous with the former’s wild ‘gymkhana’ online stunt videos, with related merchandise driving up exposure for the brand.
As well as being a sponsor of Mr Block’s rally racing cars, Hoonigan established itself as one of the largest automotive YouTube channels, featuring vehicle modification content and other related videos.
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In a bid to trade on Hoonigan’s popularity, Wheel Pros – another company which owned a number of car wheel brands, and was itself owned by private equity firm Clearlake Capital – merged with the brand in September 2021.
According to now-CEO Vance Johnston’s affidavit in the US Bankruptcy Court, Wheel Pros’ acquisition of Hoonigan came amid a period where the former brand was “experiencing tremendous growth” throughout the COVID-19 pandemic.
However, Mr Block was tragically killed in a snowmobile accident in January 2023, and subsequent changes to how Hoonigan’s management ran led to a number of high-profile departures from its popular YouTube channel.
Amid rising costs for its core wheel brands – which includes American Racing, TSW, Rotiform and KMC – Wheel Pros rebranded as Hoonigan in October last year.
However, its revenue continued to fall, leading to this week’s bankruptcy filing.
In a media statement, Hoonigan announced it aims to raise US$570 million (A$857 million) in capital as a part of its Restructuring Support Agreement, while hoping to erase US$1.2 billion (A$1.8 billion) in debt.
“Today’s announcement marks an important step forward for Hoonigan that will enable us to advance our industry leading position in the growing automotive aftermarket sector,” Mr Johnston said.
“With a significantly strengthened balance sheet and new capital, this transaction will position us to invest in innovation and further drive financial performance.
“With the strong support of our financial partners, we remain laser-focused on providing cutting-edge products and best-in-class service to our partners throughout this process.”
Following the news of Hoonigan’s bankruptcy, co-founder Brian Scotto posted a cryptic story on Instagram, teasing that he’ll be returning to YouTube.
Hoonigan filing for bankruptcy in the US comes just over a month after the German divisions of automotive seat specialist Recaro and wheel manufacturer BBS did so in their home markets.
While both companies filed for insolvency in their local German courts, the overseas divisions of the brands – now largely operating out of Japan – confirmed they were unaffected.
