728 Creditors Weigh Liquidation
Creditors expect to start reviewing a status report due on November 2 from a court-appointed insolvency administrator for Fairchild Dornier’s 728 program division, just as the most recent target date for first flight of the 70-seat regional jet once again passes uneventfully. Scheduled for this year’s fourth quarter, the 728’s first flight now couldn’t happen until late next year–if ever.
Prospects for the program, in receivership for the second time since the original Fairchild Dornier went out of business in 2002, have turned ever dimmer, as all major Western manufacturers have declined talks, while Russian and Chinese companies prefer to develop indigenous designs with government funds not available in Germany. The latest owner, China’s D’Long investment group, stood idly by while Fairchild Dornier AeroIndustries suffered an acute cash shortage early this year. After the company went bankrupt early this summer, a local court appointed a new administrator, charged with evaluating the value of the assets and reporting on the division’s viability as an ongoing concern. Once they receive the report, creditors must decide whether to liquidate or start a new search for partners to resume work on the airplane.