U.S. Bankruptcy Court Judge Christopher Sontchi signed off Friday on an exit from Chapter 11 for Albuquerque, New Mexico-based One Aviation via asset sales to bidders AML Global Eclipse and Nautical Hero Group (NHG). However, it may not be clear sailing ahead just yet.
In a November 16 auction, AML Global won the right to bid for assets related to the Eclipse 500/550 jet for $5.25 million and approximately $1 million extra in cure costs. Sontchi also approved a $225,000 bid by NHG for assets related to Kestrel Aircraft, the one-time developer of the K350 turboprop single that comprised the other portion of One Aviation.
The sale hearing was extended to November 20 after time ran out earlier in the week due to arguments by Citiking International, which once served as debtor-in-possession of One Aviation and received approval Sept. 19, 2019 for its plan to take the company out of Chapter 11.
While Citiking subsequently proved unable to provide funds for that emergence—leading One Aviation to pursue a Section 363 sale to SE Falcon that also failed and paving the way for AML Global to bid on just the Eclipse program—the China-backed entity has since proposed to leverage its debt in the company as a credit bid for those assets.
Sontchi denied Citiking’s motion but also delayed the sale’s effective date until November 27 "as a courtesy to my colleagues at the district court" in consideration of the upcoming Thanksgiving holiday, while also providing time for the two sides to come to an agreement. Citiking subsequently appealed the sale order.
Meanwhile, AML Global told the court it is moving forward with plans to rehire 45 former, non-management One Aviation employees to resume sales and support for the Eclipse fleet.