Eclipse files Chapter 11

[Changes in Latitudes]

The next big thing, this incredible VLJ market that saw so many innovations, is shrinking quickly.

Eclipse Files Chapter 11 Bankruptcy



ETIRC Affiliate Makes Offer For Company

It's happened. Eclipse Aviation announced Tuesday it is seeking court approval for debtor-in-possession (DIP) financing and procedures for the sale of most of its assets under Section 363 of the US Bankruptcy Code.



Eclipse filed for Chapter 11 protection in US Bankruptcy Court in Delaware Tuesday morning, simultaneously announcing an agreement for the sale of its assets for a combination of cash, equity and debt to an affiliate of ETIRC Aviation S.a.r.l., Luxembourg, subject to higher and better offers.



As ANN reported, ETIRC Aviation became Eclipse's largest shareholder earlier this year. ETIRC Aviation Chairman Roel Pieper has been the acting CEO of Eclipse since July 2008 and has served as Eclipse's Chairman since January 2008.



The proposed sale is subject to competitive bidding through a public auction, which is expected to be completed and a sale finalized in January 2009.



"In the face of unprecedented economic challenges, it is clear that the sale of the Eclipse business through the Chapter 11 process is the right course of action to maximize the value of the business, secure its future and protect the best interests of Eclipse's stakeholders, including customers, suppliers, employees and creditors," said Roel Pieper, CEO of Eclipse Aviation. "The successful sale will position the business for aggressive global expansion, allowing the company to fulfill its promise and solidify its position as the world's leading manufacturer of VLJs."



As Eclipse struggles through the bankruptcy process, a group of existing shareholders and note holders in the company will provide Eclipse with post-petition, debtor-in-possession (DIP) financing. Eclipse maintains this financing will provide the company with sufficient resources to continue normal business operations through the closing of the sale.



Eclipse also filed a motion with the Court to approve the financing with a request for an expedited hearing to avoid business interruption. If approved, the financing -- along with other relief requested from the Court -- will position Eclipse to pay wages and salaries, honor employee benefits, service customer aircraft and continue manufacturing operations throughout the sale period.



New York-based investment bank Greenhill & Co., Inc., has been retained as financial advisor.



Eclipse also announced Tuesday what it termed the "voluntary" departure of Peg Billson from her position as president and general manager of the company's Manufacturing Division to pursue other career opportunities. Billson first came onboard Eclipse in July 2005 as Chief Operating Officer, before being named to the new position following Eclipse founder Vern Raburn's ouster from the company three years later.



"Ms. Billson's position will be replaced with interim manufacturing oversight provided by Eclipse's senior supply chain, engineering, production and flight operations leaders," said an Eclipse release.



FMI: www.eclipseaviation.com

aero-news.net

[3=47]

never understood how they expected to sell a small jet for just over a million, when a king air or Pc-12 is selling for around 5 million or so. numbers didnt add up

[fleet16b]

never understood how they expected to sell a small jet for just over a million, when a king air or Pc-12 is selling for around 5 million or so. numbers didnt add up

Totally agree.
Actually the original plan was to sell a small jet and keep the under 1 million.
The whole project seemed shaky form the start.Only to get worse as the price kept creeping up.
If you ever saw their display at Oshkosh, they seemed to spedn alot of money on promotion and not enough on developement.
I was there when the announced that the CEO was stepping down. It felt very much like the beginning of the end.