The owner of bankrupt Timpanogos Harley-Davidson in Lindon reached a settlement Thursday with several lenders in a deal aimed at preserving the dealership, paying off creditors and protecting the jobs of its 40-plus workers.

The settlement, which is subject to approval of U.S. Bankruptcy Judge William T. Thurman, will result in Geneva Green LLC, a group of lenders, investing an additional $825,000 in the dealership to pay off creditors, reopening its lines of credit with another lender, Harley-Davidson Credit Corp., and restocking its inventory.

Geneva Green's investors include: Walter "Charlie" Openshaw; Scrub Oaks LLC, an investment group owned by Nu Skin founder Blake Roney; McKell & Associates; and RRD Investment Co.

By next week, Geneva Green is expected to complete negotiations with Harley-Davidson Motor Co. to take over franchising rights in Lindon. Under the deal, Openshaw will become managing member of the dealership. No layoffs are expected.

Tupelo Investments LLC, which owns the 60,000-square-foot Lindon motorcycle dealership and a motorcycle-themed restaurant called Marley's at 555 S. Geneva Road, filed for Chapter 11 bankruptcy protection on Sept. 3 to avoid transferring the dealership to the lenders, who are owed $3.12 million for loans they made in previous years to the dealership's former owner, David Tuomisto.

In bankruptcy court documents, the lenders claimed the bankruptcy filing was made "in bad faith" and that Tuomisto reneged on an agreement to transfer the dealership to them after getting an additional $400,000 in bailout assistance to keep the dealership's assets from being seized and its business shut down by Harley-Davidson Credit.

Among the settlement terms, Geneva Green agreed to drop its lawsuits against Tupelo; pay $500,000 to the dealership's creditors; $25,000 to Holiday Bank and Trust, a construction loan provider; and provide $300,000 in debtor-in-possession or DIP financing to help the dealer restock its inventory.

"The DIP financing will help us get 2010 motorcycles on the floor and enable us to get our lines of credit with Harley-Davidson Credit reopened so we can buy parts without having to pay cash-on-delivery basis using our cash collateral," said Tony Dawe, the dealership's operations manager.

"Geneva Green is also making arrangements to take over $600,000 in outstanding debt with Harley-Davidson Credit, which will dismiss the suit against Tupelo once that's satisfied," Dawe said.

In addition, Geneva Green will also negotiate a settlement with Far West Bank to acquire the building, which was built at a cost of $12 million, according to Dawe, also the former general contractor.

According to court documents, Tupelo said it was motivated to sell the dealership because it was unable to raise sufficient capital to fund its reorganization effort. That, together with significantly reduced luxury motorcycle sales in light of the ongoing recession and concerns it may lose access to its cash collateral and not be able to fund payroll and other operating expenses, forced Tupelo to open settlement negotiations with Geneva Green earlier this month.

Tuomisto stepped down from the business, two days after the dealership's bankruptcy filing, Dawe said.

"But he was instrumental in getting the settlement done. He wanted to preserve the jobs of his employees at the dealership. It was more important for him to preserve their jobs and make sure creditors got paid than to continue in a heated legal battle, and possibly destroy the business as a result," Dawe said.

"Geneva Green offered Dave a position as consultant with 5 percent equity interest in the company. But he has decided he will go in another direction," he said.

Dawe said Geneva Green has helped restore the confidence of its customers and its creditors with the additional funding it is providing to keep the business going.

"Not being allowed to do certain things for our customers because we are in bankruptcy has been a huge headache," Dawe said. "There were customers who were due refunds on vehicle maintenance and other insurance policies they had canceled before we filed Chapter 11. But the bankruptcy court didn't allow us to pay them because it is considered pre-petition debt."

But those issues, along with several lawsuits, will likely be resolved soon with Thursday's settlement and once the dealership emerges from its Chapter 11 restructuring effort.