Eclipse Embroiled in Legal Actions

 - April 30, 2009, 11:29 AM

A new legal dispute has emerged in the Eclipse Aviation saga, this time involving investor Alfred Mann; Etirc Aviation, subsidiary of recently insolvent investment firm Etirc; and its chairman, Roel Pieper.

On March 19, the Alfred E. Mann Living Trust filed a complaint against Etirc Aviation and Pieper, seeking more than $10 million plus interest and expenses. According to the complaint, Etirc and the Mann Living Trust agreed “to each provide $10 million in funding to…Eclipse Aviation” following Eclipse’s Chapter 11 bankruptcy filing. The $20 million was intended as debtor-in-possession financing to keep Eclipse operating until the company was sold to Etirc affiliate EclipseJet Aviation International.

EclipseJet Aviation had offered to pay $28 million in cash plus promissory notes and equity to secured noteholders of Eclipse Aviation. The sale never went through.

According to the Mann complaint, the two parties “agreed that if the plaintiff provided Etirc’s $10 million share of the funding…Etirc would be obligated to pay the plaintiff back pursuant to the terms of a $10 million promissory note.” The Mann Trust did provide the entire $20 million, and Etirc “executed a promissory note” but defaulted on the $10 million payment due February 28, according to the complaint.

Another recent legal action was launched by a coalition of law firms–Steve Siegel Hanson, Herrold Herrold, Sneed Lang and Malloy Law Firm–that hopes to file a lawsuit against officers and directors of Eclipse Aviation. The complaint would address the Eclipse leadership’s “grossly mismanaging the company and for taking down payments on aircraft that the company had no reasonable possibility of delivering and using these deposits to fund past debts rather than to build the aircraft on which the down payment was made.”