Time appears to be dwindling rapidly for Albuquerque, New Mexico-based One Aviation, as the Eclipse 500/550 support provider moves toward liquidating its assets following last week's collapse of a bid to purchase the company out of Chapter 11 bankruptcy.
In an October 14 status conference, company attorney Chris Dickerson expressed disappointment that the purchase agreement did not proceed, which he attributed in part to proposed buyer SE Falcon’s “failure to provide a deposit or to move forward with the sale in a meaningful fashion." However, Dickerson noted negotiations are under way for a new entity, Global Eclipse, to purchase the company’s assets.
That bid, which Dickerson hopes to have finalized "in the next few days," is "significantly less" than the now-defunct $13 million bid by SE Falcon. "And it is on a liquidating basis,” he added. "It is not a going-concern purchase of the company." Dickerson further noted One Aviation furloughed its remaining workforce last week to limit expenditures.
With no apparent options left to allow One Aviation to stay in business under reorganization, U.S. Bankruptcy Court Judge Christopher Sontchi questioned why the now two-year-long proceeding shouldn't be converted to an outright liquidation, noting "the burn on this call alone is more than the company can afford.
"I'm not so sure, frankly, whether it makes sense to have the debtor continue to liquidate under [Chapter] 11 as opposed to Chapter 7," he added, "but I'm going to continue to give the debtor the ability to follow up on this."
One Aviation filed a motion in late August to allow SE Falcon to bid for the company, after original debtor-in-possession Citiking International US failed to fund its emergence from Chapter 11 bankruptcy. In the aftermath of a second unsuccessful effort, Sontchi cautioned One Aviation has "a short rope" to complete the Global Eclipse asset purchase. He further advised a hearing date for that sale should be available the week of October 26.