Just days after Eclipse Aviation achieved two key milestones–EASA and Avio NG 1.5 certification–the pioneering VLJ manufacturer this morning filed for Chapter 11 protection in U.S. Bankruptcy Court in Delaware. At the same time, Eclipse Aviation entered into an agreement to sell “substantially all of its assets” to an affiliate of Etirc Aviation of Luxembourg. Eclipse also filed a debtor-in-possession motion with the court, to allow a group of existing share- and noteholders to fund “normal business operations” with up to $20 million until the company is sold in a public auction in January.
The sale to Etirc Aviation, while agreed upon, is not guaranteed and depends on the outcome of the public auction. The debtor-in-possession financing is an asset-preserving move that helps keep the company operating and the current 954 workers employed during the bankruptcy. If Etirc Aviation isn’t the successful bidder for the assets, the debtor-in-possession funds would have to be repaid by the winning bidder.
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