The bankrupt status of Eclipse Aviation finally ended in August after Eclipse Aerospace bought the assets of the very light jet manufacturer for $40 million. On September 1, Eclipse Aerospace founders Mason Holland and Michael Press joined Albuquerque mayor Martin Chávez to celebrate the reopening of the factory at Eclipse’s headquarters at Albuquerque International Air- port. A federal bankruptcy judge in Albuquerque had approved on August 20 Eclipse Aerospace’s offer to buy Eclipse Aviation.
Eclipse Aviation spent more than $1 billion developing the E500 compact very light jet and built 259 of the model by the time the factory shut down. Eclipse Aviation filed for Chapter 11 bankruptcy last November and attempted to reorganize, but a bid by Eclipse chairman Roel Pieper to take over the company failed, so Eclipse’s creditors placed the company into Chapter 7 liquidation bankruptcy on February 24. Pieper and Eclipse investor Alfred Mann were to have raised $20 million in debtor-in-possession financing to help fund the company during the reorganization attempt, but it appears that Mann put up all the money. Dutch newspaper de Volkskrant wrote earlier this year that Pieper’s company, Etirc, itself was insolvent and also that Pieper had been ordered to repay Mann the $10 million. Last year Pieper told AIN that his company had spent $150 million trying to rescue Eclipse.
Mann, who doesn’t respond to requests for interviews, appears to be in a position to try to protect his investment in Eclipse as a member of the board of directors of Eclipse Aerospace. Holland, chairman and president of Eclipse Aerospace, was an E500 deposit-holder and is cofounder and chairman of Benefitfocus.com. Eclipse Aerospace vice president Press has had a long involvement with Eclipse as founder of Single Pilot Jet Management, which bought and sold E500 positions and brokered the airplane. He is a retired Air Force colonel, owns E500 S/N 004 and was the first-owner pilot qualified to fly the small twinjet. Holland, Press and the private-equity investors behind Eclipse Aerospace paid $20 million in cash for the assets and signed notes for an additional $20 million.
Eclipse Aerospace will continue to do business as Eclipse Aviation, according to Press. By the end of September, he expected the payroll to grow to 30 people, up from an initial 15 when the asset sale was concluded. One of the new hires was Tony Parker, who worked for Eclipse for four years before the bankruptcy and is now vice president of engineering. While those rehired are all former Eclipse engineers and administrative personnel, none of the former senior or executive-level employees were asked to come back. Eclipse Aerospace has received hundreds of résumés from former employees who stayed in the Albuquerque area.
After completing an inventory of all the Eclipse assets, the plan is to begin selling parts to E500 owners and operators and provide maintenance services, including all the overdue upgrades that had been promised by the bankrupt manufacturer. Of course, E500 owners will now have to pay for the upgrades. The mods include bringing avionics up to the Avio 1.5 configuration, installing the flight-into-known- icing kit and completing aerodynamic upgrades that weren’t incorporated into the early models that came off the assembly line. Eclipse Aerospace also purchased the 28 former DayJet air-taxi E500s and plans to refurbish and sell those. Last month, Eclipse Aerospace bought North American Jet Maintenance at Chicago Executive Airport, and that will be the company’s second factory-owned service center, with the first remaining in Albuquerque. The new Eclipse Aviation does not plan to reopen the Albany, N.Y. or Gainesville, Ga. service centers, which closed after the February bankruptcy.
Key parts many owners need include PhostrEx fire bottles, flap actuators and generator control units, according to Press. Suppliers to the old Eclipse, many of which were owed a lot money, have been cooperative, he said. “Some don’t want to go back into production, and some are out of business, but that’s a minority.” Many suppliers are still holding on to a large quantity of Eclipse inventory, he added. Eclipse Aerospace has been working closely with E500 engine manufacturer Pratt & Whitney Canada, and “they’re anxious to get back into production,” he said.
The new Eclipse Aviation has renegotiated leases on all of its Albuquerque buildings and now owns the building that was used as a training center at Double Eagle Airport. There were about 30 airplanes in various states of assembly when Eclipse shut down. Eventually, Press and Holland hope to bring the twinjet back into production, but they have plenty to keep them busy in the meantime, including conducting fatigue testing to extend the E500’s fatigue life beyond the originally certified 10 years, 10,000 hours or 10,000 cycles.
“It’s pretty humbling,” Press said. “I never thought I’d be heading up an aviation [manufacturing] company. The only reason Mason and I did it is [the E500] is such a great product; we see a great future for it,” he said. Once the existing 259 E500s are fully upgraded, he added, “we’ll decide on what the E550 is going to look like.”