Black Diamond gets SOLD!

[johndavidjr]

The people who now control Black Diamond were fined less than two years ago $30 million, for knowingly endangering the lives of perhaps thousands of people who relied on their equipment.

 

These people who now control Black Diamond knew, according to the feds, that they were selling protective equipment that wouldn't work.

 

When's the next time you're going to buy Black Diamond gear?

 

Are we fools?

 

The company is dead and buried, one should hope.

 

 

[genepires]

I better get my cams reslung soon before the change of control.

 

If BD goes downhill, at least there are numerous other companies to offer good stuff. Maybe another local company will rise out of the ashes.

 

I wonder how Yvon Chouinard feels about this?

 

 

[John Frieh]

Though I havent been on cc.com since the very start I will say this could be quite possibly thee most asinine climbing thread on here yet.

 

If you no longer wish to financially support Black Diamond based on who purchased them fine: your choice.

 

But to propose that quality and reliability at BD is going to suddenly cease to exist especially considering they are employing the same exact people is delusional. Kolin P is still the manager of quality at BD and he has no intention of going anywhere. How many other companies encourage their QnR guy to write a blog on safety, answer questions from the public, and recreate accidents in a lab setting? How many?

 

Perhaps you are forgetting who pushed the 6 sigma standard in the climbing industry. Perhaps you are forgetting who threatened to move the OR show out of Utah when the governor was going to sell off land rights. FKNA people.

 

You know why we still havent raised enough money to purchase Index? Climbers are some of the most cheap ass, something for nothing user groups out there. They bitch and moan about anything.

[BillA]

Seriously John? The most assanine thread on this website? Not even close. Anyone who doesn't think new ownership will change the culture of the company is delusional. They moved production to China a couple of years ago because they want to "compete globally". That's great they have their own facility there and everything, but that doesn't change the fact that they now have a factory in a country with an atrocious human rights and environmental records. I don't care if their factory is 100% on the level, by moving there they are supporting Chinese policies, and the Chinese economy at the detriment of ours.

 

And now they get bought out by some guys who KNOWINGLY sold defective body armor to law enforcement and our military? Why would I ever want to support those people? That's great BD is keeping the same employees, I hope their quality control stays the same, but I'm guessing the realities of being a publicly traded company will change things. Anyway, I'll vote with my dollars and not support treasonous war profiteers, thanks.

[MarkMcJizzy]

Though I havent been on cc.com since the very start I will say this could be quite possibly thee most asinine climbing thread on here yet.

 

There has been many many assinie threads on CC over the years. But the preceding statement could be the most assinine post on here yet.

 

Will BD enter the windshirt market, the world wonders

[Dane]

And now they get bought out by some guys who KNOWINGLY sold defective body armor to law enforcement and our military?

 

I don't know exactly how Clarus, or those that own Clarus, were involved at Armor Holdings if they did own the company on paper before charges and fines were levied. But I find it distrubing enough in several ways to make a concerted effort to find out the details on the allegations.

 

 

 

 

[JosephH]

To be fair to Kanders, the defective vest were made by Second Chance, inc. and Kanders' Armor Holdings scooped them up in August 2005 two months after the National Institute of Justice declared the vests defective in June 2005. Legal work on the issue and fines didn't wrap up for a couple more years.

 

Kanders definitely isn't who I would have running BD, but he wasn't reponsible for the bad vests, Second Chance's previous owner, Richard Davis, was.

 

 

[BillA]

I'd be interested in seeing your source for that Joseph...

[Dane]

 

Here is more of what I found.

 

http://oig.gsa.gov/allnews.cfm

 

02/16/2010 Companies Agree to Pay $4 Million to Settle Defective Bulletproof Vest Lawsuit On February 12, 2010, Lincoln Fabrics Ltd., a Canadian weaver of ballistic fabrics, and its American subsidiary, agreed to pay the United States $4 million to settle a lawsuit against Lincoln for violations of the False Claims Act in connection with their role in the weaving of Zylon fabric used in the manufacture and sale of defective Zylon bulletproof vests.

 

Lincoln wove ballistic Zylon fabric for the body armor industry, and it was used in the manufacture of Zylon bulletproof vests sold by several GSA contractors including: Second Chance Body Armor Inc., First Choice Armor Inc. and Point Blank Body Armor Inc. These vests were purchased by the United States, and by various state, local, and/or tribal law enforcement agencies, which were partially reimbursed by the United States.

 

It was alleged that the Zylon in these vests lost its ballistic capability quickly, especially when exposed to heat and humidity. It was also alleged that Lincoln was aware of the defective nature of the Zylon by December 2001, but it continued to sell Zylon for use in ballistic armor until August 2005, when the National Institute of Justice issued a report that Zylon degraded quickly in ballistic applications.

 

In October 2009, the United States filed suit against Lincoln for violations of the False Claims Act and related claims.

 

This settlement was a result of an ongoing investigation by the General Services Administration Office of the Inspector General, the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia, the Department of Homeland Security Office of Inspector General, the Treasury Inspector General for Tax Administration, the Defense Criminal Investigative Service, the U.S. Army Criminal Investigative Command, the Air Force Office of Special Investigations, the Department of Energy Office of the Inspector General, the U.S. Agency for International Development Office of the Inspector General and the Defense Contracting Audit Agency.

 

Click here (http://www.justice.gov/opa/pr/2010/February/10-civ-136.html) for the DOJ article.

 

12/09/2009 Maker of Defective Bulletproof Vests Repays $6.75 Million for False Claims The United States has reached a $6.75 million settlement with Itochu Corp. of Japan and its American subsidiary, Itochu International Inc., to resolve claims under the False Claims Act in connection with the companies’ importation and sale of defective Zylon fiber used as the key ballistic material in bullet-proof vests purchased by the United States for federal, state, local and tribal law enforcement agencies, the Justice Department announced today.

 

The Itochu companies imported the Zylon fiber on behalf of the Zylon manufacturer, Toyobo Co. Ltd. of Japan. The United States alleged that the Itochu companies were aware that the fiber degraded quickly over time and that the companies knew that this degradation rendered bullet-proof vests containing woven Zylon unfit for use. The government further alleged that, despite this knowledge, Itochu personnel actively participated in the marketing of the Zylon fiber and downplayed the extent of the degradation problem.

 

"We will not tolerate companies that put the lives of law enforcement officers at risk by providing defective material for bullet-proof vests," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "This agreement resolves our allegations that these defendants wasted taxpayers dollars by failing to address problematic vests even after they were aware of them."

 

This settlement is part of a larger government investigation of the industry’s use of Zylon in body armor. As part of today’s agreement, Itochu has pledged its cooperation in the government’s ongoing investigation. The United States has previously settled with five other participants in the Zylon body armor industry for over $47 million. Additionally, the United States has pending lawsuits against Toyobo Co., Honeywell Inc., Lincoln Fabrics, Ltd., Second Chance Body Armor Inc., and First Choice Armor Inc. Several former executives of Second Chance and First Choice are also named in those suits.

 

Assistant Attorney General West acknowledged the contributions of the many federal agencies assisting the government’s ongoing investigation of the Zylon body armor industry, including the Justice Department’s Civil Division; the U.S. Attorney’s Office for the District of Columbia; the General Services Administration, Office of the Inspector General; the Department of Homeland Security, Office of Inspector General; the Department of the Treasury’s Inspector General for Tax Administration; the Defense Criminal Investigative Service; the U.S. Army Criminal Investigative Command; the Air Force Office of Special Investigations; the Department of Energy, Office of the Inspector General; the U.S. Agency for International Development, Office of the Inspector General; the Defense Contracting Audit Agency; and the Federal Bureau of Investigation.

 

 

01/26/2009 Canadian Company to Pay U.S. More Than $1 Million Related to Sale of Defective Bullet-Proof Vests Washington, D.C. - infoZine - Barrday Inc. and two related companies have agreed to pay the United States more than $1 million to resolve allegations that they violated the False Claims Act in connection with their role in the weaving of Zylon fabric used in the manufacture and sale of defective Zylon bullet-proof vests, the Justice Department announced today. Barrday, headquartered in Cambridge, Ontario, Canada, is a weaver of ballistic fabrics and designs and produces specialty industrial textiles.

 

The United States alleged that Barrday’s woven Zylon fabric was used in the manufacture of bullet-proof vests sold by Second Chance Body Armor Inc., Point Blank Body Armor Inc. and Gator Hawk Armor Inc. These vests were purchased by the United States, and by various state, local, and/or tribal law enforcement agencies, which were partially reimbursed by a Justice Department program. The government alleged that the Zylon in these vests lost its ballistic capability quickly, especially when exposed to heat and humidity.

 

Barrday was reportedly aware of the defective nature of the Zylon by at least December 2001, but continued to sell Zylon for use in ballistic armor until approximately 2003, when two police officers were shot through their Second Chance Zylon vests. In 2003, Barrday was the first weaver to permanently withdraw from the Zylon market.

 

"When a supplier of a component part distributes its product with knowledge of latent defects, that company violates the False Claims Act" said Michael F. Hertz, the acting Assistant Attorney General for the Civil Division. "This settlement will help ensure that component suppliers are held responsible for materials that put our first-responders at risk."

 

This settlement is part of a larger investigation of the body armor industry’s use of Zylon in body armor. As part of today’s agreement, Barrday has pledged its cooperation in the government’s on-going investigation. The United States previously has settled with four other participants in the Zylon body armor industry for over $46 million. Additionally, the government has pending lawsuits against Toyobo Co., Honeywell Inc., Second Chance Body Armor Inc. and four former Second Chance executives.

 

Today’s settlement with Barrday was the result of an ongoing investigation by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia, the General Services Administration Office of the Inspector General, the Department of Homeland Security Office of Inspector General, the Treasury Inspector General for Tax Administration, the Defense Criminal Investigative Service, the U.S. Army Criminal Investigative Command, the Air Force Office of Special Investigations, the Department of Energy Office of the Inspector General, the U.S. Agency for International Development Office of the Inspector General, and the Defense Contracting Audit Agency.

 

INFOZINE(KANSAS CITY, MO) - January 24, 2009

 

 

[Dane]

How about the rampant speculators here of wrong doing post some credible links between the management (current or past) of Clarus and the Zylon armor debacle?

 

More here:

http://online.wsj.com/article/BT-CO-20100510-706620.html?mod=WSJ_latestheadlines

 

By John Kell Of DOW JONES NEWSWIRES Clarus Corp. (CLRS) on Monday agreed to acquire two sports-equipment manufacturing companies for a combined $135 million, as the investment vehicle looks to become a significant player in the outdoor equipment market.

 

The company will pay $90 million in cash for Black Diamond Equipment Ltd. and $45 million for Gregory Mountain Products Inc. The Gregory Mountain payment will be half in stock valued at $6 a share and the rest in a seven-year note with a 5% coupon that will pay interest quarterly.

 

The deal is being led by Clarus Chairman Warren Kanders; Robert Schiller, vice chairman of Gregory; as well as Peter Metcalf, a co-founder of Black Diamond who will be appointed president and chief executive of the new Clarus, which currently has no ongoing operations.

 

Part of the transactions' allure involves investors Kanders and Schiller. The pair were wildly successful in their expansion of Armor Holdings Inc., a maker of military and heavy vehicles and soldier body armor. Under their direction, Armor expanded rapidly, completing 60 acquisitions, and growing from an $11 million-a-year company to a $3.5 billion business in just 11 years. The diversified defense and homeland security company was bought by BAE Systems PLC (BAESY, BA.LN) for $4.5 billion.

 

Gregory is being sold by entities owned and controlled by Kanders and Schiller, who purchased Gregory through Armor in 2004, and later acquired the company from BAE in 2008. The initial acquisition of Gregory in 2004 inspired Schiller to look into the sports-equipment space.

 

Since late 2002, Clarus has looked to use its cash and cash equivalents to acquire, merge with, or seek an operating business that would serve as a platform company. As of Dec. 31, Clarus had cash, cash equivalents and marketable securities of $82.4 million. Clarus last reported revenue in 2002.

 

Kanders said Clarus was looking for companies with a global footprint and exposure to the Asian market.

 

Black Diamond fit the bill. It sells skiing and climbing equipment through dealerships in the U.S. and abroad. It also sells its products on a company-run site, as well as through other online merchants. Gregory Mountain, meanwhile, sells backpacks in North America, Japan, China and France and earns more than half of its revenue in Asia.

 

Black Diamond earns more than 40% of sales outside the U.S., with sales growth abroad outpacing the U.S. The largest development in sales-and-marketing efforts is in Europe, according to Metcalf.

 

The company expects 2010 revenues on a combined basis to show continued growth. Last year, the two companies together produced combined revenues of approximately $113 million, according to Kanders.

 

Metcalf said retailers were seeing a "resurgence in their business," in a number of outdoor categories, including hiking. He said that many of those outdoor activities are recession-resistant, noting Black Diamond posted an average of 14% growth over the past 20 years.

 

For Black Diamond, the deal was key as the company faced capital limitations. It acquired four small companies over the past 20 years, and needed a jolt to launch itself into a space that has seen a number of acquisitions in recent years. Metcalf said there isn't a publicly traded entity that focuses on the space the way Clarus intends to.

 

Clarus' board of directors and officers will together own about 35% of the approximately 21.6 million outstanding shares following the completion of the deal. The transactions are expected to close in the second quarter. Clarus expects to seek shareholder approval at its next annual meeting to adopt "Black Diamond Equipment" as the company's new name. The company expects to be headquartered in Salt Lake City.

 

-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com

 

[Dane]

What I have found, lists two different issues.

 

Armor Holdings actions that got them fined for bribes.

 

http://www.tradingmarkets.com/news/stock-alert/ah_armor-holdings-elaborate-sting-set-up-a-number-of-meetings-twenty-two-are-charged-with-violating-f-831487.html

 

Then the Zylon issues in vests...previously cited and this:

 

http://www.justice.gov/opa/pr/2008/October/08-civ-901.html

 

The real question is how all this relates back to Clarus Chairman Warren Kanders. I can not find a direct connection.

 

 

 

[genepires]

Damn John, chill out. You sent hard alaskan peaks and shouldn't have the angst till next spring.

 

What user groups give $$$ for their sport? (Well, the gun people give a lot to the NRA) What are you comparing climbers against? I don't have any hard stats, but claiming that climbers are the most stingy cheap user groups sounds like bitching and moaning to me.

[JosephH]

Wiki "Second Chance Armor" and "Armor Holdings" and look at the timelines of the NIJ action and the acquisition.

[BillA]

Thanks for the info guys, interesting.

[johndavidjr]

An incredibly sordid story which reflects directly on future quality of Black Diamond equipment.

 

I can tell you first hand, the Dow Jones' story is just crap. They cook this stuff up in 10 minutes or else get fired, and don't know or give a damn what they're writing, as long as it conforms to press releases they can easily locate, and doesn't piss anybody off who they're writing about and cause them trouble when they come in to work the next day.

 

I've already provided the Department of Justice link. You can look further on the SEC pages. Those in control of Black Diamond Equipment don't give a hoot about endangering the lives of whoever uses their products. Further, they don't know or care about climbing.

 

Anybody who believes what the new management says (reliably) immediately following an acquisition about "no changes are planned," I got a nice bridge I wanna sell ya.

 

The CEO guy from Black Diamond is most certainly doomed just for starters. We needn't feel sorry of course for him.

 

It's the actual customers who lack the "Golden Parachute" when Black Diamond gear starts behaving according to the painfully obvious predictions.

 

They should just start now recalling everything.

[Dane]

An incredibly sordid story which reflects directly on future quality of Black Diamond equipment.

 

BS...I'd be one of the first to publically condemn both sides if the story had any resembalance of truth based on solid facts.

 

This story is simply a fabrication of someone with extremely poor reading comprehension and a fertile imagination.

[johndavidjr]

Sadly you're spraying crap that obscures the issue.

 

Why are you doing this? You wanna get people killed because scumbags are now running Black Diamond???

 

http://www.justice.gov/opa/pr/2008/October/08-civ-901.html

 

Feds say "Armor Holdings manufactured and sold Zylon bullet-proof vests despite possessing information showing that the Zylon materials degraded quickly over time and were not suitable for ballistic use.

 

Feds also say yes, the problem also involved other companies. That's not relevant.

 

SEC and even the dumb-ass Dow Jones story tells you that the geniuses who ran Armor Holdings now control Black Diamond.

 

Do you think the feds are making a joke with the $30 million fine???? Just some kind of paperwork?? Why do you reckon the fine was paid?

 

 

[Dane]

Obviously you have a reading comprehension issue.

 

How about the actual facts?

 

The real question is how all this (the entire topic and discussion) relates back to Clarus Chairman, Warren Kanders?

 

The time line shows that it doesn't unless you have some specifics to add.

 

To be fair to Kanders, the defective vest were made by Second Chance, inc. and Kanders' Armor Holdings scooped them up in August 2005 two months after the National Institute of Justice declared the vests defective in June 2005. Legal work on the issue and fines didn't wrap up for a couple more years.

 

[johndavidjr]

To be fair to Kanders, his Armor Holdings company was fined $30 million by U.S. Department of Justice for "knowingly selling defective bullet-proof vests."

 

What exactly about this don't you understand?

 

You're saying DoJ lied? Made a mistake? Armor paid up because they were victims? That the head of Kanders was too stupid to know what was happening and this qualifies him as controlling officer of BD??

 

Why are you making this point and WTF is your point?

[Dane]

Buying a company you assume both the assets and debts.

 

The eventual $30 Million fine was an obvious debt Kanders inherited and was not directly or individually responisble for. I'd bet there was a clause in the contract covering the eventually though.

 

"Investors Kanders and Schiller were wildly successful in their expansion of Armor Holdings Inc. Under their direction, Armor expanded rapidly, completing 60 acquisitions, and growing from an $11 million-a-year company to a $3.5 billion business in just 11 years. The diversified defense and homeland security company was bought by BAE Systems PLC (BAESY, BA.LN) for $4.5 billion."

 

Looks like a good investment and good management to me on Kanders part. My point is you have no clue about the facts or Kander's involvement.

[JosephH]

To be fair to Kanders, his Armor Holdings company was fined $30 million by U.S. Department of Justice for "knowingly selling defective bullet-proof vests."

 

What exactly about this don't you understand?

 

You're saying DoJ lied? Made a mistake? Armor paid up because they were victims? That the head of Kanders was too stupid to know what was happening and this qualifies him as controlling officer of BD??

 

Why are you making this point and WTF is your point?

 

Is there some part of this you just aren't getting:

 

William Kanders and Armor Holdings didn't own Second Chance Armor at the time they were producing defective vests

 

They were only able to buy Second Chance Armor at bargain basement prices because of the scandal - they had nothing to do with producing the bad vests - the company they bought after the scandal broke did.

[denalidave]

Maybe now BD will finally make a pup-tent to sell at MalWart for $19.95... Just sayin...

[denalidave]

Maybe now BD will finally make a pup-tent to sell at MalWart for $19.95... Just sayin...

One that is essentially, functionally equivalent, to one of those fancy-schmancy, over-priced tents all the players have to buy to look like a real climber. Again, just sayin...

[LostCamKenny]

Scotch SUCKS.

alright bill, now you're just pissing me off

[johndavidjr]

Why are you apparently so confused and stupid???

 

Reuter's story says:

 

"The Justice Department allegations concerned vest sales between 2000 and 2005, Armor Holdings said through a spokesman."

http://uk.reuters.com/article/idUKN0747464420081007

 

You can see from Kander's wedding announcement (among other places) that he was head of Armor in 1998:

 

http://www.nytimes.com/1998/06/28/style/weddings-allison-smith-warren-kanders.html?pagewanted=1

 

 

This is the guy who now controls Black Diamond Equipment and who for five years, knowingly endangered thousands of people by selling bogus bullet-proof vests.

 

Are you merely dense, or do you have some kind of agenda???