Resolution of Lew Racing debt

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Location: Cairo, Egypt

by the.paisleys

This is an update on the saga that started in April 2008 when I placed an order with Lew Racing for 3 sets of wheels, value of $15,225 and paid for by wire transfer (mistake number 1). I won’t go over all the old ground again as it is covered on other threads but suffice to say that Lew Racing never delivered the wheels and by September of last year it became apparent that Lew Racing was not in a position to deliver anything. The Company appears to have ceased trading although I have no knowledge of its legal status.

Around that time Paul Lew left Lew Racing in the hands of Lee Vaccaro. My understanding is that Vaccaro owns the company and the right to use the name. Mistake number 2 was believing a single word that Vaccaro said to me. He was the most difficult person I have ever had the displeasure to deal with and nothing he ever told me came true.

My chances of recovering any money from a defunct company would have been pretty slim if I lived in the USA but it felt like an impossible task while living in Egypt. I tried to get the consumer protection bodies in the USA and the US Embassy here in Cairo involved without success. At that point I was therefore looking at the total loss of my money.

Paul Lew got in touch in October, advising that he had left Lew Racing, was researching various business opportunities and that he would do what he could to compensate the outstanding customers of Lew Racing.

At this point, I think it is important to separate the liability of Lew Racing (the company) from the personal responsibility of Paul Lew (the individual). Lew Racing (Lee Vaccaro) had taken my money but I had zero chance of getting that money back. Paul Lew felt personal responsibility to resolve the matter but had (as far as I can tell) no legal responsibility to do so.

Paul Lew joined Reynolds in January ’09 as an employee and Reynolds agreed to work with him to compensate outstanding customers of Lew Racing. I don’t know why they agreed to do so as it doesn’t appear that they bought any of Lew Racing’s assets or liabilities. Instead, it seems to have been a goodwill gesture to help out one of their employees and the cyclists that had parted with their hard earned cash.

It is clear that Reynolds has benefited from the work done by Lew Racing as their RZR wheelset is obviously a development of the VT-1 wheels. However, that benefit doesn’t translate into a legal liability to resolve the outstanding debts of Lew Racing. So while I was thrilled to hear that Reynolds had agreed to help resolve my problems, I recognised that there was no legal requirement for them to do so.

Several months passed, including some frustrating periods when nothing seemed to happen but a few weeks ago Paul Lew and Reynolds offered me two options to resolve the issue. Both options were good and I have chosen to take current Reynolds products to the value of my original order. Those wheels have been delivered to an address in the UK at no further cost to me. As far as I am concerned, this is a perfectly satisfactory outcome to this whole saga; not what I intended 19 months ago but perfectly acceptable considering everything that has happened in between.

Lessons ?

Never pay for something up front by wire transfer. If a company won’t accept payment by credit card, get the goods before making payment. The seller’s choices are clear - accept the 3% loss on the credit card handling fee, wait for payment or forfeit the sale. Give yourself the purchase protection that comes with a credit card.

Be careful who you deal with. There is one individual that I will never deal with again even if he was selling perpetual motion machines for $1.

Human nature can surprise you. If I met Paul Lew now I would buy him a beer.

Good companies should be supported. Reynolds has gone out of its way to settle this issue when there was no need for it to do so. I already rated Reynolds as a technology company as I have a set of their rims and really like them. Now I see them as an ethical company as well as a technical company so they deserve to succeed.

I would also like to thank the WW community for getting involved and putting pressure on Lew Racing to sort out the situation.

Dominic (the guy in Egypt)

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by legs 11

Glad you got it sorted eventually Dom, it seems like you are quite happy with what has happened.
That fiasco you had to deal with was quite difficult I'm sure.
And hats off to Paul Lew for sorting this out for you, and having to bail out his once colleague LV.
One in the eye for all those hate mongers we had on here that were accusing PL of being a ripp off merchant.
I think he should have been more careful who he got into bed with when it comes to sharing business interests. :D
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by KB

Dominic - Good to hear you have some resolution to this issue.

Paul Lew has been criticised and rightly so, but he also deserves some credit for resolving the issue. Same with Reynolds. A more positive end to what was an outrageous and depressing original story.

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by marcusp

Fantastic news.
Good for you for showing patience and calm when some others (probably me included) would have been busy organising drive-by shootings.
Good for Paul Lew for (finally) coming good. It sounds like there was no legal obligation on him to bail you out, only a moral one, and it appears that he persuaded Reynold's to do so. That tells us that while he may be far from perfect he does have some decent morals, and even a year and a half later he has turned probably one of WW's darkest stories into one with a happy ending.
Good for Reynolds for having the good grace to help out. They, by their association with Paul Lew, have taken a right old pasting on this forum over several months but their selfless actions will put them, rightly, in a positive light. Human nature is a strange thing and even though I wasn't directly involved in this saga, if I was in the market for some Edge / Reynolds / Zipp wheels or rims I would now put Reynolds on the list. Yesterday I wouldn't have.
Good on WW too for (largely) telling it like it is and probably helping to keep up the pressure on those involved to find a happy resolution. Would this happy ending have happened without WW? Who knows but it would certainly have been less likely.
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by coloclimber

Statutory interest on $15,225 for 19 months. Hmmm

I am glad you are satisfied with the outcome.
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by too slow

Sorry to play devils advocate, but I wonder why they only decided to do this after Interbike. Hmm I'm guessing they realized that if they wanted to make good on their investment they better clear up the bad blood. I bet that Reynolds had now idea how bad the situation was until Interbike.

I'm glad you got this resolved to your liking, and I hope others are equally happy with their prospective offers extended to them on behalf of Reynolds. Glad to see at least one happy ending on this one.

I will refrain from any personal judgement on Paul Lew as I don't know the man. But I don't think I would ever purchase anything that he designed or that bears his name. In my mind Reynolds really cheapened their brand as of late.

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by Zen Cyclery

Reynolds went above and beyond.

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by ritcheykestrel

I am glad that something positive happened out of the mess that became of Lew Racing.

I am glad the OP listed all the information as I did not know all of it, I thought PL was the owner.

Anyways, like I said many times in the other posts on here, I hope things work out in the end for everyone, and it seems like it did for Dominic!

Congrats for Reynolds for stepping up.

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by TheBugMan

I'm really happy for you Dominic :thumbup:

Some hard lessons learned though.
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by bcheung

Reynolds definitely went above and beyond, and I'll be giving them weighted consideration when it's time to buy my next set of wheels! :thumbup:

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by lancejohnson

I don't know Lee from a bump in the road, but from everything I know about Paul, I would shower the thanks on Reynolds and reserve any praise offered in Paul's direction. Let's remember who set up the house of cards that was Lew Racing, who ducked everyone for months, and who clearly left others holding the Lew Racing bag once the lawsuits from Reynolds came (Paul headed back to Reynolds as part of the settlement). Lee may not have been an angel in this situation, but I have never heard anyone who has worked closely with Paul describe him as such.

Paul is not known for his high moral standards (how is it that he developed Shimano's carbon rims when he was under a non-compete with Reynolds after selling his company to them?) but has a reputation for taking credit and pointing fingers. Even a half-second re-examination of the claims in the OP suggest that most of this situation is not above-board with Paul and Lee, otherwise how would Lee own Lew Racing and all it's assets and liabilities, but Reynolds is now basically making the VT-1 wheel?

I say great for Reynolds for cleaning up the mess, and glad to hear Dom got money back, but at this point anyone getting into bed with Paul should have their head examined.

"Organization is for the simple-minded, the Genius controls the chaos." - Jens

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by marcusp

Statutory interest on $15,225 for 19 months. Hmmm

I am glad you are satisfied with the outcome.

It's also possible to look at things in a positive light!
"When I was a boy of fourteen, my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished at how much the old man had learned in seven years."
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by wasfast

I'll add to the chorus for the OP that I'm glad you got more than a bunch of emails to show for $15K.

True that Reynolds had no legal responsibility to clean up Lew's mess. They were certainly aware of the baggage from Lew Racing when they hired him back earlier this year. From a marketing standpoint, they had to rebuild some of the burned bridge back to customers. Let's face it, not many folks are going to buy $6K RZR wheels and those that do certainly know the genetic history of how they came about. Goodwill goes a long way in a small niche market.

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by Raxel

Really glad to see the news. I think reynolds has a long way to go though...

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by Geoff

Hmmmm. This has been an interesting issue to watch. It would be most interesting to know the 'behind-the-scenes' story.

In my experience, most do not act 'out of the goodness of their hearts'. I can't imagine that the intellectual property for the wheels was worth nothing. I have seen very similar situations (albeit in a different industry) resolved by the purchaser going back to the vendor and adjusting the purchase price for its cost to resolve the issue with past clients so as to preserve good will. Generally comes down to who pays...

by Weenie

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