Emivest Aerospace’s Chapter 11 bankruptcy reorganization filing late last month revealed that the company has until January 14 to find a buyer or could face Chapter 7 liquidation. Any prospective buyer of the manufacturer of the SJ30 light jet would have until February 4 to close the deal. An initial Chapter 11 filing and failed reorganization followed by a Chapter 7 filing is not uncommon in the aerospace industry–it was the pattern at recent bankruptcies at failed light jet makers Adam Aircraft, Eclipse Aviation and Epic Aircraft. Emivest is continuing limited operations under a debtor-in-possession financing agreement that could provide the company with up to $4 million in interim cash, but that package comes with big origination, termination and redemption fees that could top $1 million, as well as $40,000 per month interest. More than $60 million of Emivest’s debt was accumulated over the last two years–a period that saw it deliver only two of its $7.2 million light jets. Even if the company finds a buyer and restarts operations, it is unlikely to be able to deliver more than three aircraft over the following 24-month period, according to documents in the bankruptcy filing.
Clock Is Ticking for Emivest To Find a Buyer
- November 4, 2010, 12:03 PM