Motorsport news: Hoonigan goes bankrupt with over $1.8 billion in debt

Hoonigan, the brand made famous by the late internet icon Ken Block, has filed for bankruptcy citing $1.8 billion (USD 1.2 billion) in debt.

The late Ken Block during an FIA World Rally Championship round. Image: Photo4/XPB Images

The clothing and lifestyle brand was acquired by private equity firm Clearlake Capital in 2021 and rolled into aftermarket wheels company Wheel Pros.

Now the brand has filed for Chapter 11 bankruptcy and is aiming to rid itself of its more than a billion-dollar debt and raise hundreds of millions in capital.

Block died in 2023, nearly a year and a half after the merger. Wheels Pro rebranded many of its staples including TSW, American Racing, and Rotiform under the Hoonigan banner.

Combined, the company has more than $2.6 billion (USD 1.75 billion) in debts, including the $1.8 billion (USD 1.2 billion) that the bankruptcy expects to eliminate.

In a statement, Wheel Pros LLC said it “has commenced an in-court financial restructuring process to position it to drive long-term growth.

“The Company has entered into a Restructuring Support Agreement (“RSA”) with a majority of its debtholders through which it expects to eliminate approximately $1.2 billion of the Company’s debt and secure up to approximately $570 million of new capital, substantially improving the Company’s balance sheet and financial position.”

Although the company finds itself in serious financial strife, Hoonigan CEO Vance Johnston said the business would look to reposition itself.

“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,” said Johnston.

“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.”

Hoonigan has ties to Australian motorsport via sponsorship through Walkinshaw Andretti United’s Chaz Mostert.

Hoonigan is also prominent on the grille of the Audi R8 LMS GT3 driven by Will Brown and Brad Schumacher in Fanatec GT World Challenge Australia Powered by AWS.