One Aviation Creditors Ask Court To Rule To Liquidate

The unsecured creditors of the Albuquerque, New Mexico-based One Aviation and related debtors have asked the court to convert the company’s Chapter 11 bankruptcy restructuring case to a Chapter 7 liquidation, according to a May 8 court filing. 

On Oct. 9, 2018, One Aviation entered Chapter 11 bankruptcy with a restructuring plan to exit under the ownership of Citiking International. 

Citiking is a U.S. firm backed by Chinese investors that had been investing in the company, which manufactured and serviced Eclipse business jets, after its bankruptcy filing. One Aviation had also planned to produce a larger aircraft, the Eclipse 700. 

After several delays in the case, in September 2019, the U.S. Bankruptcy Court approved One Aviation’s bankruptcy reorganization plan with a deadline to exit bankruptcy by Dec. 1. 

With the deadline not met, the Court said during a February status conference that it was concerned the debtors did not have a “fully baked transaction.” The Court decided, however, that a conversion to Chapter 7 was “premature.” At that time, the unsecured creditors had hoped the status meeting would spur the parties to reach “reasonable resolutions,” the filing said. 

Now, another three months has lapsed, it noted. 

In addition, the Debtors are not paying all administrative fees as they become due. 

The Committee of the Unsecured Creditors understands that Citiking may want to negotiate to reduce fees related to the bankruptcy, the filing said. It also needed time to prepare credit documents. 

But “simply put, it shouldn’t take nearly eight months to negotiate fee concessions and prepare simple credit documents,” it said. 

The case has been “plagued by delay, disputes” and funding issues, the creditors said in the filing. 

“In light of … Citiking’s failure to consummate the Plan in a timely manner, and pay all administrative expense claims when due, conversion of these cases to Chapter 7 is warranted,” the filing said. 

Besides One Aviation, other debtors include ACC Manufacturing, Aircraft Design Co., Brigadoon Aircraft Maintenance, MR Management, Eclipse Aerospace, Innovatus Holding Co., Kestrel Aircraft Col., Kestrel Brunswick Corp., Kestrel Manufacturing, Kestrel Tooling Co., and OAC Management. 

A deadline for objections is May 22, with a hearing scheduled for June 4.