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Paul Teutul Sr. says other people run Orange County Choppers' mechandising arm: “I'm the talent,” he said.

By Jessica Dinapoli
Times Herald-Record
Published: 2:00 AM - 03/01/13

POUGHKEEPSIE — Lawsuits over Orange County Choppers artwork snowballed into the Chapter 7 bankruptcy of the bike-building empire's merchandising arm.

The creditors of the merchandising unit have slogged through about six years of litigation with the Town of Newburgh motorcycle shop. Now, they're embroiled in the bankruptcy, filed in January.

The litigation began when one of the world's largest graphic-design houses filed a lawsuit against Choppers, claiming that the company broke a contract, infringed copyrights and unjustly enriched itself.

Images pirated, ODM says

The California company, ODM, said Choppers took the images of shields, feathers and daggers it had designed and licensed them to ODM's competitors to earn more money, breaking a 2003 agreement. ODM also sued the competitors who were working with Choppers.

Many of those competitors are now creditors, claiming Choppers owes them a total of $1.4 million. That sum represents legal fees Choppers was responsible for and penalties the companies had to pay to ODM, said Saul Mishaan, an attorney representing one of the creditors, apparel company C-Life.

Complex legal issues

The convoluted legal battle was the subtext for the creditors' meeting Thursday in Bankruptcy Court in Poughkeepsie. Chapter 7 Trustee Paul Banner grilled Paul Teutul Sr. about the division, called Hudson Valley Merchandising, and its assets.

The merchandising unit's biggest asset is an almost $900,000 IOU from a company called Horizon NY Inc. Banner asked Teutul if he knew anything about it.

Teutul said he wasn't familiar with it, but that some people in his company may be, though they might no longer be working for him.

Horizon NY Inc., an apparel and accessories company, was named as a defendant in one of the earlier licensing lawsuits. It satisfied a $90,000 judgment ODM won against it.

Money transfer questioned

Banner also questioned Teutul about the approximately $430,000 moved out of the merchandising unit's TD Bank account in about nine separate transfers over the course of 2010.

The money was for operating expenses, Teutul said.

Teutul, waiting alone in the lobby before the meeting, said other people run the merchandising part of Choppers.

"I'm the talent," he said.

He noted that most of his attention is on promoting the company, and that he has been traveling extensively lately.

The steelworker-turned-motorcycle mechanic was wearing a T-shirt emblazoned with a company logo.