Chinese firm to buy Epic assets
A bankruptcy judge on April 12 approved an asset purchase agreement between China Aviation Industry General Aircraft (CAIGA, also known as AVIC General Aviation) and the bankruptcy trustee of Epic Air. CAIGA’s bid of $4.3 million
was the highest and best offer for the Epic assets, according to the court. The next highest offer was $4 million by Harlow Aerostructures of Wichita. Harlow had previously bid unsuccessfully on the assets of bankrupt Eclipse Aviation.
On Sept. 10, 2009, the three companies composing kit airplane manufacturer Epic Air filed for Chapter 11 bankruptcy, leaving a dozen partially built Epic LT single-engine turboprops trapped in Epic’s Bend, Ore. facility. The move, followed on October 16 by a Chapter 7 (liquidation) filing, signaled the end of the fanciful dreams of company chairman and CEO Rick Schrameck, who has not been heard from since.
For many years, Schrameck would show up at airshows with yet another new composite airplane– one year a smaller turboprop single, another a single-engine jet– and promises of FAA certification and super-high-performance low-cost kitplanes. The money to achieve that never came to pass, and the result of the bankruptcy was that individuals helping build their Epic LT kits at the Bend facility risked losing hundreds of thousands of dollars when the bankruptcy closed Epic’s doors. The bankruptcy included Epic sister companies Aircraft Investor Resources and Aircraft Completion Services (which contracted with kit buyers to help them build their airplanes).
As part of the resolution of the sale of Epic’s assets, CAIGA and LT Builders Group (LTB, which also bid on the assets) signed a memorandum of understanding that called for CAIGA to license to LT Builders “the intellectual property and technology for the aircraft known as the ‘Epic LT’ and to enable LTB to establish and operate an aircraft manufacturing business in the United States and specifically, Bend, Oregon.”
As it turns out, according to Epic builder Rich Lucibella, “CAIGA assigned the asset purchase agreement, in its entirety, to [LT Builders]. It then licenses back certain rights from LTB for the sum of $1 million.” Lucibella owns one of the partially built Epic LT turboprops in Epic’s Bend facility.
There is one beneficial aspect of the sale of the Epic assets for builders whose airplanes were stuck at the Epic facility. Under the asset purchase agreement, the assets do not include “any partially completed aircraft or any parts inventory that are owned by amateur builders who are the Debtor’s customers…”
The agreement also does not include any defense-related material that might be subject to International Traffic in Arms regulations or any property owned by Tbilviamsheni or Tam-Air, which had worked with Epic on developing a twin-engine jet. Before the closing of the sale, the court required that kit-builders be allowed to remove their aircraft and parts from the Epic facility.
As for Schrameck, the Oregonian newspaper reported on April 7, “The FBI is investigating, according to lawyers involved in the Epic case.”