Eclipse Aviation filed for Chapter 11 bankruptcy protection today and it appears ETIRC, the company controlled by current CEO Roel Pieper, is moving to consolidate its hold on the troubled planemaker. According to a news release from Eclipse, the company is "seeking court approval for debtor-in-possession (DIP) financing and procedures for the sale of substantially all of its assets under Section 363 of the U.S. Bankruptcy Code." At the same time it announced it has a buyer for the assets, described as "an affiliate of ETIRC Aviation S.a.r.l., Luxembourg" and that the deal is subject to "higher offers." According to court documents filed by Eclipse in support of the petition, the company owes investors about $577 million and has racked up about $135 million in debt to vendors and suppliers.
"In the face of unprecedented economic challenges, it is clear that the sale of the Eclipse business through the Chapter 11 process is the right course of action to maximize the value of the business, secure its future and protect the best interests of Eclipse's stakeholders, including customers, suppliers, employees and creditors," Pieper is quoted as saying in a release. "The successful sale will position the business for aggressive global expansion, allowing the company to fulfill its promise and solidify its position as the world's leading manufacturer of VLJs."
And to address the current cash crunch, Pieper has cut a deal with existing shareholders and lenders to keep the company alive in the interim. The company is asking the Delaware court, where the petition was filed, to approve the interim financing package quickly so Eclipse can honor its commitments. Once approved, this financing along with other relief requested from the Court, will position Eclipse to pay wages and salaries, honor employee benefits, service customer aircraft and continue manufacturing operations throughout the sale period.
The company also announced that Peg Billson, president and manager of the company, has resigned "to pursue other career opportunities."