LZ bankruptcy orphans hundreds of Let L-410s

 - October 4, 2007, 10:07 AM

A Czech regional court in Brno has declared Let Kunovice and Ayres Corp. successor Letecke Zavody (LZ) Aeronautical Industries bankrupt, once again leaving hundreds of 19-seat Let L-410 turboprops without a factory support structure. Letecke Zavody, the subsidiary of Czech light-plane manufacturer Moravan Aeroplanes, assumed control of the Let assets in 2001, after the now defunct Albany, Ga.-based Ayres failed to deliver on its promise to certify the 40-seat Let L-610G turboprop and revive subassembly work at the half-century-old manufacturer.

LZ’s demise comes as a result of the court’s endorsement of a series of creditor petitions, including one filed by a pair of Canadian investors who threatened to seek international arbitration proceedings against the Czech Republic if it didn’t file criminal and civil charges against company chairman Libor Soska.

Frontier Petroleum Services principles Don Jewitt and Milan Matusik claim they bought 49 percent of the company’s stock for Kc205 million ($6.9 million), but after they demanded an accounting of their investment, LZ personnel physically blocked Matusik’s entry into the plant for a board meeting. Soon afterward, Matusik discovered that LZ reconstituted its ownership structure, leaving a Soska-controlled company called MMT Plus a 51-percent stake and Moravan Aeroplanes the remaining 49 percent. Soska claimed the money invested by Jewitt and Matusik represented a loan repayable in five years or an equity stake in the company after that period.

Meanwhile, Seattle-based entrepreneur Randall Brink continues his quest to assume control of the company in a plan to certify the GE-powered variant of the L-410 known as the L-420. Brink, an aspiring airline chairman and one of three bidders for Let’s assets after Albany, Ga.-based Ayres lost control in the spring of 2001, claims the bankruptcy administrator obstructed his attempts to buy the company by withholding critical contractual documents. He also asserts that because the Prague-based private bank CSOB had filed a bankruptcy claim against parent company Moravan Otrokovice before the end of the Let tender process, Moravan Aeroplanes should not have legally qualified as a buyer.