Carolina RailHawks Assets for Sale on eBay and Craigslist
Our friends at the Triangle Offense blog in Cary, NC broke the news Thursday evening. The Carolina RailHawks are having a fire sale and everything must go. I kid you not.
Even Swoops the Carolina RailHawks mascot costume is for sale. But it's a packaged deal with the rights to the RailHawks trademark and website domain name. Photo by Jarrett Campbell
Most of the items are on Craigslist and are being sold at the team office in a sale that started Thursday and runs through Saturday. Here are a few of those items:
Big screen TVs
A train horn that goes off when the team scores a goal
Flash light with traffic cone (10)
Air splints with bag (4)
Set of crutches (4)
Cobalt safe with combination lock
Training pinnies: 50 for $25
Professional quality soccer balls: $60
…and the list goes on. You can see all the items by going here.
More importantly is the Carolina RailHawks Trademark going for $960.00 on eBay, or at least it was last time I checked.
One of the items on Craigslist is the costume for the RailHawks mascot Swoops. But according to Mike Blake of SWakeSports Swoops is packaged with the RailHawks trademark.
I’ve had many concerned and faithful IMS readers emailing me with these links today. Beside time constraints I was also waiting to post something until I could get more information on this situation. As you can imagine rumors seem to be flying today on blogs, websites and discussion boards. I’m hearing anything from the fact that the Wellmans are holding out after they’ve dissolved their company to wild ones that the NASL has given up on Carolina. I think we’ve all become so accustomed to the wild, wild west of the D2 and D3 over the last several years that we expect something dramatic. In this case I’ve been told it’s most likely a lot simpler.
Talking to a lawyer familiar with business law and copyrights it’s as simple as this: When a corporation is dissolved, as Carolina RailHawks, L.L.C. has been, it’s a normal course of business in these situations to auction their assets off in order to ensure they are securing fair market value. This is often done when corporations dissolve if they feel there may be litigation or outstanding debt after the dissolution. There are other ways they could have done it. For instance, Carolina RailHawks, L.L.C. could wait until creditors came after them and then gone through a bankruptcy judge and let him basically do the same thing. The way the Wellmans are conducting this may be a more transparent and honest way of dealing with debt that is left with the LLC as they shut down their side of operations.
As to the Trademark, this is how the eBay post reads:
In 2010, the Carolina Railhawks reached the championship of the 2010 USSF D2 professional soccer league. All rights, title, and interest of the seller in the Carolina Railhawks brand, including the common law trademarked team name and all associated logos, symbols, designs, slogans, and mascot, and the internet domain name www.carolinarailhawks.com, will be transferred and assigned to the buyer upon completion of purchase.
Even the train horn that blasted after each and every RailHawks goal is up for sale.
My understanding is that “common law” means the team never filed a trademark application with the US Patent and Trademark Office, therefore their logo is not in the database. Our soccer friend Jarrett Campbell, who started the supporters group for the RailHawks, is actually the one who came up with the team name. Common law trademarks are not as inclusive as if you had registered the name. If they had registered the name, after five years of unopposed use, the mark becomes “incontestable”. This is not the case. Because they never registered the name, whoever wins the auction for the RailHawks name may not have 100% use of that trademark, depending on the situation. That’s why God made trademark attorneys.
With that said and knowing how many readers at IMS that are brighter and more knowledgeable than I am, I’m guessing I’ll likely have other takes on this situation.
Comments are closed.
North America For Sale League, tell Devo to can it tomorrow, his rants bring nothing to the table that’s productive and he’s just pissed off Rhinos are in D3.
Your soul for a buck anyone?
It sad it had to end like that. Your whole liefs work on sale for penny on the dollars. I ask you is this what a stable D2 look like?
Well I would be willing to bet the good fans in Cary would take the “D-3″ right now than this WSW. It is appalling you would even make those thumb-nosey comments anymore, say a hundred hail mary’s and hope your team even plays before getting voted off the island.
This is infuego survivor right now on TV and Carolina just got voted off the island. First CPB, then ACSTL, Austin via Orlando/Roch left voluntarily (malnutrition maybe?) and Vancouver left for a better reality sitcom deal. Who’s next to get voted off the island? Stay tuned for next week’s episode. Oh, and the ratings will keep climbing….
The tribe has spoken, Mr. Wellman took his torch (Traffic put the flame out) and went home….
The only dead franchise is ACSTL. Baltimore is on hiatus til 2012.
WSW, we’ve had this discussion before. I believe it was you that I answered about this the other day. Perhaps you didn’t go back and check the comments after you left the last one. I have my doubts that Baltimore will be back and for good reason. You’ll have to dig it up cause I’m just not going to write it again.
I went to the fire sale today and learned that there may be a press conference in the near future regarding the future of pro soccer at WakeMed Park. I was told the fans will be happy with the news. Fingers are crossed.
This can’t help NASL’s attempt for sanctioning. Just looks bad.
Rowdies changed their name to FC Tampa Bay, I don’t know why Carolina can’t do the same.
Its kind of a big deal if you want to sell tickets and get sponsors to buy in or be taken seriously in your market. How’s the corporate sales pitch going to be?
Prospective Sponsor “I read in the Cary Business Journal you sold all your business assets and team name on ebay? What League do you play in?”
Team Rep “Oh that was the old owner, we are the new owners and we are trying to get sanctioned for Division 2 soccer NOT Division 3! I can explain the difference and the story of our impending perseverance…”
Prospective Sponsor “OK, thanks for coming in, we’ll keep you in mind…”
Prospective Sponsor calls his secretary—”Did they leave yet? I can’t hold my laughter any longer….”
Honestly, this isn’t funny, its sad. The franchise is doomed either way, its too late, the damage has been done.
@Cantine
Don’t be so pessimistic
Hey MH would you get me a scarf and jersey? Of course I will pay you for it.
@WSW – Don’t be so naive. I know you are smarter than you let on. As was explained to you somewhere else, this is totally different than just a team name change like with Tampa.
The Railhawks are dead. There isn’t a team in Carolina now. Traffic owns a few players and the coaches contracts. Other than that, nothing. There is no organization. They don’t have any equipment to train with, no desks to work on, no computers or phones, nothing.
They have no one to sell tickets or promote the team. No place booked to play in. No person to make travel arrangements. Traffic would basically have to start a team from scratch and get it running in a few weeks. Given their track record with a team they had plenty of time to work with, well do I have to spell out how ridiculous this is? This is everything the NASL was suppose to avoid and mocked the USL for.
I think it was a great juxtaposition between Davidson’s “vision” in that crazy fanhouse.com interview and seeing that mascot head in a box. You can’t make it up.
I thought it was also telling that Davidson all but said that they are hellbent on D2 because pro/rel is “enviable” because fans will demand it. WTF? Tell me if I read that wrong. That’s what he said. That’s the reason he said they can charge higher fees than USL and attract investors in a closed system for D2. That’s why it is D2 or bust for NASL. It was all built on that crazy idea. That and Traffic wants to D2 to develop players and sell them abroad. Yeah, that will help grow the game in America.
So it seems like Davidson is trying to sell a cheap way into MLS to potential NASL owners by filling their head with pro/rel nonsense. Which is bogus since MLS will never have pro/rel and will only have “financial” promotion if teams establish themselves as viable MLS franchises. Montreal, Seattle, and Vancouver were not “promoted”. They are different teams than the ones that played in D2. They paid expansion fees and got their financial status up to MLS standards. I am sure Don Garber pulled out what is left of his hair when he heard that. At this point, I don’t think NASL has a friend in MLS. Just another black mark as they head toward the iceberg.
Dave, everyone gets to speak their mind here but please be polite and don’t put others down. Feel free to express your opinion which you’ve done. Now I’ll express mine.
I will tell you that I totally disagree with you and your site. Whether NASL gets sanctioning or not is yet to be known.
Will it be a different team in Carolina. Yes, yes, it will – with a GM that has had years of experience running a MLS franchise and is familiar with your area as well.
(BTW, did you actually read my article and the legal reason for this sale? You seemed to miss that in your comments about the team not having desks to sit in etc…)
You will have the same fantastic coach (I’m a big fan of Martin) and many of the same players back.
Will the name be the same? We don’t know that yet and it is still possible they may retain the name. I certainly hope so and it will be tougher to market the team if they lose that name. I don’t disagree with that at all. But it’s an unknown and we shouldn’t be so quick to jump the gun. There’s a lot of things going on behind the scenes right now.
Did the Wellman’s do a fantastic job or running the old RailHawks for whom you mourn? The answer to that is yes and no. They did a fantastic job with sponsors and putting a class team on the field. Kudos to them for that. I suspect they lost millions in doing so. As the man you seem to so despise, Aaron Davidson, told me in a video interview (you can find on this site) to invest in pro soccer in America at this point and time, you are basically a philanthropist. I think we owe the Wellman’s great deal for putting the team there and running it for four years.
Did they do a good job marketing the team in your area? From everyone I know down there and from what I’ve seen of the attendance numbers, no. They certainly did not. It was an area of weakness for the organization.
While I totally appreciate your passion for the RailHawks, let’s not jump the gun here. There are a lot of things that cannot be said at this point in time for legal reasons. That goes for both parties, the NASL and the Wellmans.
Lastly, NASL seems to be all bad in your opinion and that’s fine if you believe that. But you need to be balanced and ask yourself about the Wellman’s bailing on the league just after they received provisional sanctioning. That certainly hurt their cause. To that point, Traffic/NASL did not exactly force the Wellman’s out of the picture. They owned Carolina RailHawks, L.L.C. and made the decision to not field a team in 2011 unless Traffic helped them out. This happened after another primary investor fell through. The Wellman’s were the ones to make the decision to ask Traffic/NASL to help bail them out. And they knew they had them over a barrel because the NASL needed an 8th team. It’s a complicated and sticky situation.
By the way, that “cazy fanhouse.com interview” as you call it was written by Brian Straus, who in my opinion is one of the better soccer writers in this country at the moment. I was able to meet him in Toronto at MLS Cup and sat at a round table with Brian and about 20 other soccer writers who were invited by MLS to sit at a round table with Commissioner Don Garber. It was clear that Garber has a lot of respect for him.
Again, I appreciate your passion Dave. Let’s see what happens in the next couple of weeks.
Real sad, but quite real my friends. This is the world of business. Moreover, soccer business is that much more difficult. Really sad to see it go, but I don’t think this is the end of pro soccer in that region. The soccer following is excellent, particularly with the local college program. Again, I’m really sad to see the Railhawks go, but pro-soccer will be back in that region. I’m hopeful.
Having read a little more, I think my post is missing some the point somewhat. If I can clarify a little of the mess above, I’ll just add that even if the financial backing that the Wellmans have provided goes, I think Carolina will continue to have a team. Businesses looses leadership all the time. Good businesses tend to attract new, good leadership. As BQ stated in one of his posts above, we just need to evaluate the organization for what it presently is and hopefully the new leadership will do just that.
I’m sure Traffic is working behind the scenes to get Carolina back up and running as quickly and smoothly as possible. As I’ve said numerous times before, Traffic is in it up to their necks at this point, there just doesn’t seem to be any way they could just quit now. They HAVE to have Carolina to have a league, they’re not going to let them die. It sure would be nice if they could acquire the Railhawks name. It would make the job of marketing the team so much easier.
Is it ideal to have to be sorting through these kinds of things in the final two months leading up to your inaugural kickoff? Obviously not. Hell, those of us in South Florida are still dying to learn what Traffic’s “actual” team is going to be named, but our crest and kits will look like, and for them to start doing SOME kind of local advertising for the team. There is a lot to do all over the place for the entire league still at this point. I’m praying they can work through everything, and wind up with some kind of USSF sanctioning, even if it isn’t D2, and come April 9th, there will be a lot of happy soccer fans around the country watching their teams kick off.
I am very close to the Railhawks situation and knowledgeable of all the facts. Brian has once again done a remarkable job of reporting. He is correct that the Wellman’s chose this form of action of dissolution as the best legal way of leaving. Furthermore there will be a team in Carolina once the name has been decided and I also believe the NASL will be sanctioned shortly.
The sky is falling, the sky is falling! Fear not, the situation(s) will resolve and we will have D2 soccer in the summer of 2011.
Same thing happened to the Salty Dogs, 2 good years, owners lost millions and left debts all over the place, including to the Rhinos, NASL wouldn’t give relief to keep team in league.
Sad, but the song has been played in communities all over the nation.
As is stated above, ownership of soccer franchise at any level in the States at this time is basically a BIG act of philanthropy with a limited showing
Sorry to see them go, the Wellingtons, and Economides were nice to try and make this a go for the past 4 years.
I see they have extended the terms of the auction after it ended today. seems pretty poor form if you went down today and hold the highest bid on an item only to be out bid tomorrow. Now if they closed the items that had bids and extended the bids for items that hadn’t been bid on that would be different.
@ Daniel Blodgett:
If you’re serious, I can try to get you a jersey, but there were no Railhawks scarfs that I saw.
@MH Yes I am serious. How much are they going for? I don’t want to pay too much. If they are under thirty dollars U.S. then that is great.
@MH I just noticed that their Craigslist ad, mentioned that they were $12. That is super cool if that is the price! I am a medium by American sizing.
The Railhawks trademark is now at $14,999. A lot of activity over the last 24 hours, and a big jump from $960.00
Daniel and MH, you guys want to get a room or what?
Does it involve cheap soccer memorabilia and vintage action figures?
A point that I don’t think has been brought up is that the org dissolving, that voids all of their player contracts. So technically all of the players and coaches would be free to pursue other contracts. Maybe they have already signed new contracts with the new org, but they would be free to shop around to other teams. But overall this probably isn’t a huge impact because most players at level are on year contracts. But just wanted to bring this point up, because they have the potential to lose some of their core players.
Auction on the name just ended. Went for fifteen grand, to “j***c”, the only bidder involved from the start to the finish (and therefore a prime suspect for being Traffic).
Wait a minute. If they were the only bidder why did the amount keep going up?
BB, you may have a point but I’ll check on that. The NSC didn’t dissolve but the league did buy the team and then picked up the contracts. As to the RailHawks situation, you may very well be right after the explanation I had the other day about a corporate dissolution.
I am not a big fan of mascots at sporting events. I hope that whomever bought that item keeps it retired–and only brings it out for events like Halloween.
@Brian Q.
There were other bidders, but the one that won was the first and last bidder.
If it was Traffic, I am glad that I could jump the price by $10,000 over a 1 hour period. $15,000 is the threshold amount you can bid up to on EBay before Ebay wants something serious, like a credit card to prove capacity to purchase.
Whoever j**c was, they had an automatic bid increase by $100 over the next bidder working with the EBay bid.
Wellman just made more money through my small effort than he ever did through his involvement with the team.
j***c was involved early, against a couple other people. As the price went up, everybody else dropped out, but then somebody else joined near the end.
(Given that it’s all accounts with no history, the somebody else could be a sock puppet for one of the early ones.)
By the way and to be clear, what was posted on the EBay site was not a national trademark right. If the Railhawks filed for a trademark with the Federal Government, which is not the document on the site, that would have been a different sale.
The document on the site was merely the North Carolina Secretary of State’s “Certificate of Assumed Name for a Limited Partnership.” This was not ownership of a trademark, it was the right for Triangle Professional Soccer, LLC to use the name exclusively in North Carolina.
Since the entity was dissolved in December, the right to the name was dissolved as well. And that, my friends, is one reason I do not understand why Wellman dissolved the entity. Under normal circumstances, and entity that is about to stop business first divests itself of its assets (even under the manner in which it was done) prior to dissolving the entity itself. Once the assets are liquidated, the cash is then distributed to those creditors that are owned monies, with the first priority being those that held lien rights to those that were not collateralized. Then the asset is dissolved and a final tax return is filed.
This is significant, because if Triangle Professional Soccer, LLC created any liability AFTER it was dissolved, the corporate veil is punctured and Wellman himself could be personally liable for those liabilities.
So, to sum up, I am not real sure what exactly was bought, other than a piece of paper. Technically, since Triangle Professional Soccer does not exist, then it cannot assign a piece of paper from the State as there is no authority to do so.
Actually, under North Carolina law, the dissolution of a L.L.C. is the triggering event for the “winding up” process by which assets of the L.L.C. are collected and disposed. Such a process cannot begin UNTIL the L.L.C. is formally dissolved.
§ 57C‑6‑04. Winding up.
(a) Except as otherwise provided in this Chapter, the articles of organization, or a written operating agreement, the managers shall wind up the limited liability company’s affairs following its dissolution. If the dissolved limited liability company has no managers, and provision is not otherwise made in the articles of organization or a written operating agreement, the legal representative of or successor to the last remaining member may wind up the limited liability company’s affairs. The court may wind up the limited liability company’s affairs, or appoint a person to wind up its affairs, on application of any member, his legal representative, or assignee.
(b) As promptly as reasonably possible following dissolution as is consistent with obtaining the fair market value for the limited liability company’s assets, the persons charged with winding up the limited liability company shall collect its assets, dispose of its properties that will not be distributed in kind to its members, discharge or make provision for discharging its liabilities, and distribute its remaining assets as provided in G.S. 57C‑6‑05. The limited liability company shall continue in existence following its dissolution and during its winding up, but shall carry on only that business appropriate to wind up and liquidate its business and affairs.
(c) The dissolution of the limited liability company does not transfer title to its assets, prevent assignment of its member interests, subject its managers to standards of conduct different from those prescribed in Article 3 of this Chapter, change any provisions of its operating agreement except as provided in subsection (b) of this section, prevent commencement of a proceeding by or against the limited liability company in its own name, abate or suspend a proceeding by or against the limited liability company, or terminate the authority of the registered agent of the limited liability company.
The piece of paper in the photograph is not the only thing listed; the auction listing also claims it included rights to the common-law trademarks, though it’s not clear to me whether said rights still exist to sell. (Then again, fifteen thousand to not have to fight over it in court might well be worth it even if you think the answer is no.) We’re also given to understand that the Swoops costume was included with the trademarks, as he was not actually available separately.
The whole thing is confusing, from where I sit.
@enmoo7
I forgot, you are correct, this is an LLC, and as such has a different set of requirements. Each State has a different way to do this.
teucer. You’re make’n me laugh, man. Did you ever read the article you are commenting on? All that info is right in there as well as the newest article I posted.
BQ: The contents of the auction listing are clear in both your posts and (with the exception of Swoops’ inclusion as more than IP) in the eBay auction, but Bart seems to have overlooked them in his claim that they were selling the piece of paper in the photo. That part isn’t confusing to anyone who’s paying attention.
The clarification about NC laws around LLC dissolution in enm007′s post is helpful; not knowing jack about corporate law, that explains why the trademarks get sold after the company that owns them dissolved (and that the company does still in some sense exist for there to be somebody to assert the rights currently and therefore to sell them). That answers one of my biggest questions about the matter – yes, the trademark rights persist for j***c to buy.
Things that still throw me: why they did it this way rather than selling the marks along with the player, coach, and staff contracts (which would seem more normal – I don’t know of any other teams to have been sold in this fashion in the past, and new owners aren’t exactly uncommon); whether the sale of the contracts actually went through (I’m not aware of any documents suggesting it’s the case, unlike the filing for the dissolution of TPS, but everybody seems to take it as written so I’m presuming it did); why nobody seems to have spoken to the town of Cary about it all despite the stadium lease being rather a big deal for the future of the team.
I wrote that Swoops was included and linked to Mike Blake’s article that stated that as well. Bart’s a very smart guy and knows full well what’s for sale. It’s just from a business side those things really don’t have much value. It’s the name itself that is what drives the cost.
@BQ:
I was probably not clear in that yes, I knew what the other items were that came with the common law trademark rights.
The name is indeed the most important item of value, much like the name Cosmos or Rowdies or even Oscar Meier!
Having used general corporate law interpretation, not specific North Carolina legislation, the lease agreement for the stadium, as long as there has been no material breach of the lease by Wellman (which I would not expect) is still part of Triangle Soccer. If there is no assignability restriction in the lease, Wellman could assign the lease over to Traffic, but I suspect there probably is, as this is a municipality venue.
Since the lease is a liability on the balance sheet, Wellman could simply let the lease terminate for non-payment.
If Traffic is picking up Carolina, more importantly, since NASL needs Carolina as a team, I would be surprised at this point if some contact with the local officials has not been made, no matter how they gain leasing control of the stadium.
I do agree that the bidding seemed very insider oriented. The bid was set at $500 and when the $14,900 bid was placed, the automatic bid went to $14,999. Since up to that point all bids were supposed to be in $100 increments, and EBay then stated that the next minimum bid was $15,099, something triggered a change, which could have been the Seller’s instructions.
Bart’s a very smart guy, and I respect him from his comments on here, but asserting that the fact that the paper in the photo is one specific thing means that’s what’s for sale seems weird. Yeah, they probably do get that sheet of paper (because eBay has, at least historically, had this thing about auctions having to be for tangible goods), but that’s not what the auction is about.
And yeah, there’s no way it’s anything other than control of the name and logo that drove the price up. The website’s valuable, but not that valuable (frankly, once you control the marks, setting up a new site at just railhawks.com or something is easy enough); ditto Swoops. No, what matters is whether you can use the name or not, and I’m pretty sure that’s not worth a damn thing to anyone who isn’t planning to run a soccer team.
teucer, there seems to be some things on this auction that don’t seem to add up.
I don’t think much at all of this Carolina situation adds up lol. Wackiness all around. Maybe the weirdest story so far from the ever engrossing Division 2 Soccer Drama. All new every offseason, weekdays on ABC!
Whatever the outcome of all this, I hope the good folks of Cary, NC have their team back, preferably under the Railhawks name.
…that and hopefully “D2 Soccer Drama” is canceled permanently lol. Here’s to (hopefully) better days ahead for those of us soccer fans outside the realm of MLS.
Bart,
Just an eBay clarification. The minimum raise applies to “new” bids.
Let’s assume bidder A has a bid or $12,000 in, but the current high bid appears as $10,000.
If bidder B bids $14,999, the listed bid will change to change to $12,100, or $100 more than A’s bid.
If bidder A comes back and bids $14,900, bidder B’s automatic bidding bumps it to $14,999 because B has still bid more than A, even though B’s bid is less than the $100 minimum bid increase.
It’s why you often get large numbers of bids in high dollar auctions. You’ll get one bidder probing to find out where the current high bidder has set their line. Unfortunately, it is often the case where someone is placing fake bids to maximize the sale price. It is also very, very hard to catch – and eBay has a financial stake (final value fees) in not catching it except in egregious, repeat offender, cases that can damage eBay’s reputation.
I HOPE this auction takes the cake. Ultra put it well. As Brian has pointed out, until the US federation puts out their D3 standards, “Division-2 soccer drama” will be replaced in it’s entirety by “Division-3 soccer drama.”
I went to the auction sale and was told that there would be good news coming but they couldnt say anything more than don’t worry this is just a legal technicality.
I also got a call to purchase season tickets last Thursday so the wheels were still turning up to then. I assume that when they called they knew about all of this and about what’s coming after and that they’ll have a team on the field for those tix they were still trying to sell.