With the model train industry in decline, Ernst Paul Lehmann Patentwerk started restructuring and cost-saving measures in 2002 and further intensified them in 2005.

These measures included an employee-supported salary forfeiture and, in mid-2006, transferring Lehman's North American distribution and service subsidiary, LGB of America (LGBoA), to a new United States-based firm, G45.

Multiple entities, including model train manufacturers Märklin, Piko, and Hornby, bid on Lehmann.

It was announced on December 22, 2006, that Hermann Schöntag, the then-owner of the German Rügen narrow-gauge railway, had been selected by Lehmann's creditors to purchase the firm.

The second round of bidders included G45, new owner of LGB of America, and Märklin, another German model train manufacturer.

Märklin had recently faced a situation similar to Lehmann's; it had been family owned from its founding in 1859 until 2006, when its accumulating debts led to it being sold to Kingsbridge Capital and Goldman Sachs.

An interim agreement concerning only already-manufactured product was signed on September 21, 2007, giving LGBoA exclusive distribution and service rights in North America.

Though LGBoA was not dissolved, Silvergate assumed distribution of remaining LGB stock as well as current and new product lines.