Citiking: Pandemic Hinders One Aviation's BK Emergence

 - May 26, 2020, 9:51 AM

This story is part of AIN's continuing coverage of the impact of the coronavirus on aviation.

Citing the ongoing effects from the Covid-19 pandemic, Citiking International US LCC filed its opposition last week to an attempt by the unsecured creditors committee (UCC) in the Chapter 11 bankruptcy case of One Aviation to force the Albuquerque, New Mexico-based aircraft manufacturer into liquidation. Eclipse Aviation and Kestrel Aircraft merged in 2015 to form One Aviation.

The UCC asserted Citiking's "failure to consummate the plan in a timely manner and pay all administrative expense claims when due” in its motion filed May 8, with a June 4 hearing on the matter scheduled before the U.S. Bankruptcy Court. One Aviation entered Chapter 11 in October 2018.

In its May 22 filing, Citiking maintained it has worked diligently through the bankruptcy process despite “a series of obstacles,” including resolving previous objections raised by the UCC and attaining approval from the Committee on Foreign Investment in the United States (CFIUS) for the sale of the company to the Chinese-backed investment group.

The last major stumbling block appears to be negotiating a new asset-based loan (ABL) with One Aviation's primary debtors. "However, those discussions…were complicated by another major obstacle: the outbreak of the Covid-19 pandemic," reads the May 22 filing. "The [UCC] completely ignores that economic reality.”

Citiking further asserted it remains committed to One Aviation's emergence from Chapter 11 but is working to ensure "that the debtors are not back in bankruptcy court as a result of structuring the facility in a manner that does not make sense due to the rapid economic changes caused by the pandemic."