Creditors Ask Court To Force One Aviation Liquidation

 - May 11, 2020, 12:03 PM

The unsecured creditors committee (UCC) in the ongoing Chapter 11 bankruptcy case of aircraft manufacturer One Aviation requested a hearing to convert the case into Chapter 7 liquidation in a court filing last week. One Aviation entered Chapter 11 in October 2018, intending for an expedited trip through bankruptcy court and emergence by the end of that year under ownership by the Chinese-backed investment group Citiking International.

Several delays followed, however, including objections raised by the UCC over Citiking's ultimate intentions for the company and a move by the U.S. trustee to dismiss the “pre-packaged” Chapter 11 plan over concerns with Citiking’s ability to successfully take the company through the bankruptcy process. One Aviation has been developing the Eclipse light jets and the Kestrel single-engine turboprop. 

With those objections resolved, the U.S. Bankruptcy Court confirmed One Aviation's post-bankruptcy plan in September 2019, provided it exited Chapter 11 on or before December 1. That date passed without further resolution, prompting a February 2020 warning from the court that Chapter 7 conversion remained a possibility.

Albuquerque, New Mexico-based One Aviation appeared to clear another hurdle in March, following approval of the company’s sale by the Committee on Foreign Investment in the United States (CFIUS). However, no apparent progress toward emergence from Chapter 11 has followed.

“In light of…Citiking’s failure to consummate the plan in a timely manner, and pay all administrative expense claims when due, conversion of these cases to Chapter 7 is warranted,” reads the May 8 filing by the UCC.

A hearing on that conversion is scheduled for June 4.