The future of Dean Guitars’ producer Armadillo Distribution Enterprises, Inc. has never been more in question, as court documents filed by its lenders reveal the guitar-maker and distributor is being pursued for debts of approximately $10 million.
Armadillo refutes the claims and says it “will be vigorously defending these suits.” However, if the court finds in favor of Armadillo’s lenders, it is hard to see how the firm will be able to continue as the producer of Dean Guitars.
Documents filed by Armadillo lender Valley National Bank show that the bank is attempting to foreclose on Armadillo’s debt and has demanded the firm turn over its business assets, including the surrender of “all equipment” and “all inventory” (Count V).
All complaint documents mentioned are available to view publicly on Hillsborough County Clerk website (see below).
Guitar World has spent time reviewing the documents in an effort to understand the picture facing the guitar maker and what it might mean for the future of Dean.
A tangled web
The story involves a complex network of companies and corporate structures that revolves around the Rubinson family – namely Pamela Keris-Rubinson, widow of former Dean/Armadillo CEO Elliot Rubinson (who passed away in 2017) and their son Evan Rubinson.
You might be familiar with their names already. The pair have already exchanged numerous allegations in court, with the arguments entering the public domain following Evan’s termination as Armadillo CEO in June 2022.
To explain the extent of the issues facing Armadillo requires an understanding of the firms involved and their relationship to Dean and Armadillo.
We’re here for the guitars, rather than the Succession-like drama, so we will do our best to keep this brief – but nothing about this is simple.
Wait… Dean’s not a company?
Armadillo is often described as Dean’s parent company, but this is not correct. The firm is owned by the Elliot P. Rubinson Trust, with Pamela as the trustee, meaning that Rubinson’s widow currently has complete control of Armadillo.
Dean Guitars is actually not a company, but a trademark owned by Concordia Investment Partners, LLC (as are acoustic guitar brand Luna and ddrum Percussion). This second firm is owned and controlled in a 50/50 split between Pamela and Evan.
Concordia licenses its guitar brands and designs to Armadillo, which produces and distributes the instruments themselves.
On January 18, Evan – in his role as Concordia owner – filed a lawsuit against Armadillo in an attempt to establish that Armadillo had neglected to pay the agreed royalties to Concordia for the use of the Dean, Luna and ddrum trademarks.
This left Pamela in the somewhat bizarre position of having a company she half-controls (Concordia) sue a company she fully controls (Armadillo).
All of which brings us back to the Armadillo debt.
The first loan: Armadillo’s $4.5 million
Valley’s 289-page complaint document reveals that in June 2020 Armadillo set up a line of credit with Valley National Bank for $4.5 million, secured against Armadillo’s business assets (things like its instrument inventory, equipment, contract rights and, essentially, anything else of value owned under the company name).
Concordia was used as a guarantor for the loan – meaning that its own assets, including the Dean brand name and trademark, also became security on the loan.
The resulting agreement meant that if Armadillo stopped repaying the debt, then both its own assets and Concordia’s would be on the line.
That debt appears to have been regularly paid and reduced until 10 December 2022, at which point Valley alleges Armadillo began missing payments.
Your guitar company is at risk if you do not keep up your repayments
Soon after (December 20, 2022), Valley began foreclosure proceedings against Armadillo and Concordia, demanding repayment of the full outstanding debt of $4,130,669.07 plus accrued interest, charges and legal costs.
In its filing, Valley National Bank estimates Armadillo’s assets to be worth in the region of $4.8 million, but to repay that much debt all at once would likely require the sale of many essential assets.
In the documents, under Count V, the lender alleges Armadillo is now refusing to surrender the assets, noting they “are being wrongfully detained” and continue to be used “in the ordinary course of their business operations.”
In other words, Armadillo seems to have attempted to carry on as normal.
This on its own would represent a substantial threat to Armadillo’s operations. However, the firm is also being pursued for the repayment of a second, even larger, loan.
The second loan: EPR Investments’ $6.2 million
Valley National Bank’s filing also reveals that in June 2020 – the same period it extended Armadillo’s line of credit – Valley also granted a mortgage loan of $6.2 million to another firm controlled by Pamela Keris-Rubinson, EPR Investments, LLC.
This third company was set up by Elliot Rubinson and Pamela Keris-Rubinson and is now controlled by Pamela. As of 2004, its purpose has been to act as a separate entity through which to purchase and own the property for Armadillo’s headquarters and warehouse in the Tampa West Industrial Park, Tampa, FL.
As with most mortgage agreements, the property itself was used as security on the loan.
In 2020, a remortgaging agreement with Valley secured a $6.2 million loan to EPR and Armadillo and Concordia were both used as guarantors for that agreement. The filing shows both mother and son signed off on the arrangement.
Why are we talking mortgages? Well, as a result of the 2020 contracts, the producer of Dean Guitars’ assets became security on both loans – a $4.5 million loan in its own name and the $6.2 million mortgage to EPR, which it guaranteed.
The three firms – the guitar producer, Armadillo; the trademark holder, Concordia; and the property entity EPR – were tied together not just by Pamela Keris-Rubinson’s name, but by their debt guarantees. If one went, others could be at risk.
This would not be a problem for Armadillo, provided both it and EPR continued to make the agreed payments. However, according to Valley, as of December, 2022, they did not – on either loan.
Armadillo in turn alleges that the defaults on both loans are “manufactured [and] fictitious.”
The bank’s complaint alleges that the mortgage holder, EPR Investments, began to miss payments on the larger debt from November 10, 2022.
Valley has since sold the larger of the two debts (EPR’s mortgage) to a different company, Water49, which has begun its own foreclosure proceedings in a separate lawsuit – claiming it is owed $5,858,403.40.
Fighting on all fronts
As such, Armadillo is now fighting at least three lawsuits relating to money it allegedly owes: one against Concordia (filed by Evan), which aims to establish it has not paid agreed royalties; one against Valley to reclaim the $4.1 million outstanding debt and one against Water49 that alleges that under its obligations as EPR guarantor, it owes it nearly $5.9 million.
Even discounting the suit brought by Evan via Concordia (who arguably has a vested interest in Armadillo failing, following his dismissal), the guitar producer still finds itself in a serious situation.
Indeed, the result of the foreclosure filings alone is that Armadillo is now being pursued through the courts by separate firms for debts worth at least $9,989,072.02.
According to the conditions of the loans, Armadillo’s cash, product inventory (every guitar it has made but not sold), equipment, and contract rights are all at risk of being seized by the lenders.
Meanwhile, the Dean trademarks and other IP that it licenses from Concordia are at risk of being seized, as is the Armadillo HQ building and the land it is built on, following EPR’s alleged default.
If you’re wondering what’s left? Well, you’re not alone.
Not dead… yet
It should be underlined that all of this is entirely dependent on the court finding in favor of Valley and/or Water49 – and, again, Armadillo vehemently denies the accusations, as you’ll see below – but there’s undoubtedly a lot on the line for the guitar producer.
Whatever, happens. It is the most significant and, perhaps final, development in a hugely fraught period of the Dean producer’s history – one that has been defined by litigation.
Since Evan’s 2020 departure from Armadillo, Pamela Keris-Rubinson and Evan Rubinson have been engaged (via various companies) in multiple legal battles.
Meanwhile, in 2022, Armadillo was the subject of a successful lawsuit by Gibson for trademark infringement and forced to stop producing its popular V, Z and Gran Sport models.
In addition, a suit from Dimebag Darrell’s estate prevented the production of further signature guitars, while star endorsee Dave Mustaine parted ways for Gibson in early 2021. All of which has left the Dean line-up severely depleted.
What does Armadillo have to say?
Guitar World put the findings and allegations laid out in Valley National Bank’s foreclosure filings to Armadillo and the guitar producer responded in alleging the bank itself was at fault.
“These lawsuits are frivolous,” a representative told Guitar World, in a statement supplied via the firm’s attorney.
“There is a reason there has been no progress on the case since Valley National Bank filed suit nearly one year ago in December 2022. The suit was filed in response and retaliation for us confronting the bank about its highly improper business and banking practices.
“Concerned about its own liability, the bank manufactured fictitious defaults under the loan documents and sold a real estate loan to Water49 because it was concerned about our Counterclaim for substantial damages.
“Remarkably, Valley National Bank continued its history of improper business and banking practices by misrepresenting the existence of defaults to Water49 in order to obtain payment for its sale of the real estate loan before its conduct would be subject to judicial review.
“We will be vigorously defending these suits and are confident we will prevail after the Court is apprised of all the facts and circumstances. Stay tuned.”
Armadillo has not supplied evidence of its allegations against Valley. In addition, Valley’s attorneys were, in turn, contacted to offer comment, but have not yet responded.
What does Evan Rubinson have to say?
Guitar World also approached Evan Rubinson for comment, given his role as CEO at the firm during the time the debt agreements were made and his present co-ownership of Concordia.
The former CEO insists he has had no contact with the firm (outside of legal documents) since his departure, but remains optimistic that the Dean brand will outlast the litigation.
“My tenure with Armadillo – the licensee of the Dean, Luna, and ddrum marks – ceased in June 2022, about six months before the default asserted by Valley Bank,” says Rubinson, in a statement supplied via his own attorney.
Despite Armadillo’s lawsuit, I strongly believe Dean Guitars, Luna Guitars, and ddrum, as well as their owner, Concordia Investment Partners, have a very bright future ahead
“As a result, I was not involved in, and have no information about, the events that led to Valley’s lawsuit against Armadillo or EPR Investments.
“Despite Armadillo’s lawsuit, I strongly believe Dean Guitars, Luna Guitars, and ddrum, as well as their owner, Concordia Investment Partners, have a very bright future ahead.
“These brands will continue to serve as pillars of the musical instrument community for years to come, as they have for the past 30 years under the leadership of Elliott Rubinson and his family.”
Ultimately, at the heart of these many arguments are guitar industry workers and, in Dean, a historic brand. Let’s hope that both can prosper down the line.
Both complaint documents are available to view publicly on the Hillsborough County Clerk website.
To view Valley National Bank’s complaint document, look for case number 22-CA-010510, document index number 39.
To view Water49’s complaint document, look for case number: 23-CA-012343, document index number 7.
Update 9/13/2023: This article was amended as it contained a typo that incorrectly suggested Evan Rubinson was terminated as Armadillo CEO in June 2020, as opposed to June 2022.