You could almost hear a collective gulp within the business aviation community last August when a U.S. Bankruptcy Court ordered Chapter 7 liquidation of Avantair, the Clearwater, Fla.-based fractional aircraft ownership program.

A major player in the fractional industry (and the only one listed as a public corporation), Avantair marketed shares in only one type of aircraft, the Piaggio P180 Avanti. It had 56 of the canard-configured pushers on its roster when it permanently ceased operations in June 2013, leaving between 600 and 700 shareholders grounded with no guarantee they could recoup their investments.

While it is not without precedent for a fractional operation to shut down — Cessna, for example, pulled the plug on its CitationAir program in 2012, subsequently buying out its shareholders, and years earlier Flexjet replaced its fractional program in Europe with a charter operation — the Avantair program is the first really big fractional scheme to go bankrupt. Since 1986 when Richard Santulli launched NetJets, the business aviation community has wondered what would happen to fractional aircraft owners in the event of a total financial collapse of their operator. Now, as the Bankruptcy Court for the Middle District of Florida attempts to unwind the complexities of the Avantair operation, it's going to find out.

Among the many concerns are the impact the Avantair debacle will have on used business aircraft valuations, especially Avantis; on Piaggio Aero Industries of Italy, which was holding orders from Avantair for 50 more P180s; and on fractional programs in general.

Meanwhile, the court-appointed bankruptcy trustee, Beth Ann Sharrer, has been tasked with determining whether malfeasance among managers, corporate officers or board members was an issue in the Avantair failure, “including but not limited to claims of negligence, breach of fiduciary duty or self dealing.”