Eclipse Aviation filed for Chapter 11 bankruptcy protection on Tuesday morning, in order to continue operations “with lower costs and reduced debt liabilities.” As it filed for bankruptcy, Eclipse also announced an agreement to sell its assets for “a combination of cash, equity and debt” to an affiliate of ETIRC Aviation S.a.r.l. of Luxembourg. Roel Pieper, ETIRC Aviation’s chairman, has also served as CEO of Eclipse since the ouster of company founder Vern Raburn in July. ETIRC is Eclipse’s largest shareholder. Though subject to competitive bidding in a public auction, the sale is nevertheless expected to close in January. In the meantime, a group of Eclipse shareholders will provide the company with post-petition debtor-in-possession financing to service customer aircraft, continue manufacturing new aircraft (more than 200 Eclipse 500s have been delivered), and cover wages, salaries and employee benefits until the sale is finalized. Also on Tuesday, Eclipse announced that Peg Billson, president and general manager of the manufacturing division, was leaving her position “to pursue other career opportunities.”-For our editor’s view on Eclipse, see… Eclipse Declares Bankruptcy: What does it mean?
Eclipse Files Chapter 11, Agrees to Sell Assets to ETIRC
Key Takeaways:
- Eclipse Aviation filed for Chapter 11 bankruptcy protection to reduce costs and debt while continuing operations.
- The company announced an agreement to sell its assets to ETIRC Aviation, its largest shareholder and led by its current CEO, with the sale expected to close in January following a public auction.
- Shareholders are providing interim financing to ensure continued operations, including customer aircraft servicing, manufacturing, and employee benefits, until the sale is finalized.
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