Here’s my question, if you forked out a million bucks for an airplane and the company goes out of business a year or so later and the FAA decides to ground the aircraft because there is no company out there to support the type certificate, what recourse do you have as an owner?? This Eclipse thing is going to end up being a huge mess!
Eclipse Aviation officials have given up on attempting to resurrect the bankrupt firm by means of Chapter 11 reorganization and instead filed a motion to proceed directly to Chapter 7 liquidation of all assets. The actions follows Eclipse Aviation’s failure to obtain additional bridge financing to continue operations until Luxembourg-based ETIRC’s EclipseJet Aviation International could buy the assets and resume operations.ETIRC was unable to complete the asset buy out by the end of January due to lack of funds, prompting its three largest secured creditors, Kings Road Investments, HBK Services and Citadel Investment Group, to press the U.S. Bankruptcy Court for the District of Delaware to liquidate its assets.
As a result, 800 or so Eclipse Aviation employees on temporary furlough were informed on Tuesday they were being permanently laid off, effective Feb. 19. There will be no paychecks issued on March 5 and no vacation pay accruals will be honored. Coverage of all benefits will end on Feb. 28, 2009, however COBRA medical/dental/vision benefits may be available until March 31.
Eclipse officials anticipate that the U.S. Bankruptcy Court will appoint a trustee to oversee the Chapter 7 liquidation proceedings within 30 days. The trustee then will sell or auction off all the assets and intellectual property, delivering the proceeds to the secured creditors. But, company insiders believe the sale will recover only a fraction of their estimated fair market value of $75 million to $125 million.
Company insiders also believe the FAA will move quickly to ground the entire Eclipse 500 fleet because no entity will exist to support the Type Certificate.
Eclipse Aviation Files For Liquidation | AVIATION WEEK
As an owner of the Airplane, do they not have the right to transfer the type certificate to a different company? My next question is, why doesn’t the owner of the plane have the type certificate?
From what I understand, it’s a screwed up deal. I might be wrong on this but I think that the company that manufactured it has to do the type certificate for the aircraft, my business partner can probably shed more light on this than I can since he fly’s one. I bet the only recourse they have is to hope someone in a 3rd world country that is out of the jurisdiction of the FAA wants one of these dudes…
Here’s another one for you, what if they have it financed and all of that? Do they keep making payments and keep the insurance up on the million dollar paperweight? ha.