Chapter 7 Filing Signals End of Eclipse Era

 - February 26, 2009, 10:43 AM
In a letter sent to employees on Tuesday, Eclipse Aviation general manager Michael McConnell and CFO Mark Borseth wrote that “our company is out of time and money” and that the company’s senior secured creditors filed a motion in bankruptcy court for Chapter 7 liquidation. The plan by Eclipse’s largest shareholder, Etirc Aviation, to buy the company’s assets and eventually restart production of the Eclipse 500 VLJ has failed, they said. In a statement issued yesterday Eclipse said, “The company has suspended all business operations and expects the court to promptly appoint a trustee to oversee the liquidation of its assets.” The employee furlough that was announced last week is now a layoff, according to Eclipse, and employees will not be paid on March 5 and benefits coverage ends on February 28. “We gave it one heck of a try,” said the letter. “We are sorry that it came to this today.” Eclipse founder and former president and CEO Vern Raburn told AIN that the Chapter 7 filing “was a real tragedy for so many different reasons. It’s a little like watching a relative die; you know it’s going to happen, but when it does happen, it’s tough to deal with.” Raburn said he is most proud of having delivered more than 250 jets, none of which have been involved in a fatal accident. “If I were to do another Eclipse,” he said, “I would do things differently. You make mistakes and learn from them. What really killed Eclipse was its inability to achieve production volume.”