Van’s Aircraft Files for Chapter 11 Bankruptcy Protection

The kit manufacturer has been struggling to recover from supply chain and quality control issues.

Van’s Aircraft has been facing supply chain challenges, faulty primer that led to corrosion problems on quick build kits, and issues with defects in laser-cut parts. [Credit: Van’s Aircraft]

Kit manufacturer Van’s Aircraft filed for bankruptcy protection under Chapter 11 on Monday, announcing plans to reorganize the company.

The move comes a little over a month after Van’s announced a series of changes designed to combat “serious cash flow issues, which must be addressed quickly to ensure ongoing operations.” According to the company, the problems stem from COVID-related supply chain challenges, faulty primer that led to corrosion problems on quick build kits, and recent issues with defects in laser-cut parts.

“As a result of this combination of issues, the company experienced serious cash-flow problems from which it could not recover through the normal course of business,” Van’s said in a statement. “During that time, Van’s built up a significant and high-value parts inventory. As we manufacture the additional parts needed to balance this inventory, we will leverage it to fulfill orders for kits and parts over the next 12 to 18 months.”

Van’s is expected to file a proposed reorganization plan with the court within the next 90 days. The company says it will continue to provide parts, service, and support, along with shipping kit orders, during the reorganization. Plans are being developed for customers affected by the Chapter 11 filing, though the company noted that those plans are ultimately dependent upon court approval.

Plans for Existing Customers

For customers who received laser-cut parts, Van’s says it has now “completed a careful, detailed review that delineates the specific list of laser-cut parts for each individual customer kit order.” If approved, the company says it intends to begin contacting impacted customers with detailed information on the parts and its parts replacement program with the goal of beginning to ship replacements this month. Van’s hopes to have delivered replacement parts to all affected customers, estimated to be more than 1,800, by the end of 2024.

Van’s reported that it is also reviewing all open parts orders, some of which will be hit with price increases. “Customers with open parts orders that require updated pricing will be contacted soon and will receive access to a website where they will be able to review and act upon the details of their existing orders and Van’s proposed order modifications,” Van’s said.

In addition, prices for kits and parts are expected to increase. Van’s plans to “begin contacting customers with open kit orders that were placed prior to the filing date within the next 7 to 10 days with an offer to apply the full amount of their existing deposits toward the purchase of the same kit, under new terms and conditions including a price increase.” Customers with deposits on kits should be on the lookout for an email with a link “to a website where they will be able to view the details of their existing order, the amount of their deposit and Van’s proposed order modifications.”

“Van’s expects to resume shipping in-stock kit orders within the next 7 to 10 days,” the company said. “We will do our best to prioritize those who have waited longest, but our kit fulfillment schedule must be financially acceptable to the court, based substantially on cash flow rather than the traditional and historical method of order fulfillment that Van’s customers have experienced in the past. We will be constrained by – and will make prioritization decisions based on – the rate and timing of order renewal, availability of in-stock parts, and our need to ship kits that generate positive cash flow. Where we are able to do so, we will also consider the age of the original customer order.”

The company says it is still working with its engine, propeller, and avionics partners to get a plan in place for customers with deposits on those products. Van’s noted that orders that don’t require modifications will be shipped as usual.

“The purpose of the Chapter 11 filing is to allow Van’s to continue to provide ongoing support for its customers, suppliers, and employees for many years to come,” Van’s said. “We understand that this situation creates a hardship for everyone involved. However, without these changes we do not see a viable path forward that would allow Van’s Aircraft to remain in business and support its customers.”

Editor’s Note: This story was originally reported on by KITPLANES.

Kate O’Connor is a private pilot, certificated aircraft dispatcher, and graduate of Embry-Riddle Aeronautical University.

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