An 11th-hour effort on January 31 failed to keep OEM startup VisionAire afloat after a federal district court judge placed the company back into Chapter 7 bankruptcy on January 21. The company had been operating under Chapter 11 bankruptcy since September, when the judge agreed to the voluntary insolvency after five creditors petitioned the court to place VisionAire into involuntary Chapter 7 bankruptcy in July. Following the January 21 ruling, company officials had 10 days to obtain additional financial backing.
“We needed to show the judge we had $1.2 million in hand and proof that we would get the rest of the $120 million we required to restructure, but we just could not get the money,” Jim Rice, CEO, told AIN. “There’s no hope to get back into Chapter 11 now.” VisionAire had been negotiating with two separate financial sources.
A court-appointed trustee had 20 days from January 31 to devise a plan for selling the assets of the Chesterfield, Mo. company, including the intellectual property relating to the six-seat, single-turbine Vantage VA-10. Not included in the sale, said Rice, are the sole Vantage prototype, which had been previously sold to a customer-investor and leased back to the company, and a facility, planned for the VA-10’s assembly, in Ames, Iowa, which is owned separately by some VisionAire investors, including Rice. Vantage customers, whose deposits are held in escrow, will receive their money back, he said, when the court releases these funds, possibly within a month.
Rice said the company had more than 450 investors with equity stakes ranging from $5,000 to $4 million, the average being from $75,000 to $100,000. Interestingly, now that Rice and other former company officers have no further fiscal responsibility to VisionAire, “we are free to bid on the assets of the company like anyone else,” he said. “I believe the Vantage will still be built somehow,” he concluded.