After many fits and starts over the past 11 months, Albuquerque, New Mexico-based One Aviation received confirmation from the U.S. bankruptcy court this week for its plans to exit Chapter 11 before year-end under ownership by Chinese-backed investors Citiking International.
“The Plan is approved in its entirety and confirmed under section 1129 of the Bankruptcy Code,” U.S. Bankruptcy Judge Christopher S. Sontchi ruled on September 18. "All objections and all reservations of rights pertaining to confirmation of the plan or approval of the disclosure statement that have not been withdrawn, waived, or settled are overruled on the merits."
The ruling calls for One Aviation to exit bankruptcy upon the plan’s effective date, on or before December 1. However, the company will also need to secure approval from the U.S. Committee on Foreign Investment in the United States (CFIUS) for One Aviation to be acquired by Citiking—a decision separate from the bankruptcy court’s jurisdiction.
Approval of the reorganization plan came with support from secured and unsecured creditors in One Aviation operating units Eclipse Aerospace and Kestrel Aircraft, following a bit of gamesmanship by Citiking earlier this year that compelled some previously reticent parties to sign onto its amended reorganization plan. However, even with those creditors on board, the U.S. acting trustee continued to express concerns about Citiking’s efforts to hasten the confirmation process following months of delays.
In a September 9 filing, the trustee alleged the company had provided "insufficient" notice to concerned parties in petitioning the U.S. bankruptcy court for a September 11 confirmation hearing after releasing its amended reorganization plan August 30, immediately before the U.S. Labor Day holiday weekend. According to the trustee, that provided little time for a thorough review of the plan by concerned parties. Despite the trustee’s objections, the court moved to delay the confirmation hearing by just one week, to September 18.
The trustee stated at this week’s hearing that some creditors had not been presented with the opportunity to vote again on the altered terms of the amended reorganization plan. Sontchi determined seeking new votes would further delay the process, forcing Citiking to expend additional money to support One Aviation as debtor-in-possession, and would not likely affect the final outcome.