Van’s Aircraft filed its reorganization plan with the bankruptcy court late Friday. Three key elements stand out in the filing. First, the plan is for secured creditors to be fully repaid. Second, unsecured creditors (mainly builders with deposits who did not agree to increased prices earlier this year), will be repaid approximately 55% over three years. Some builder creditors will be considered priority creditors and be paid $3350 soon after the reorganization is approved and the remainder over the three-year period. Third, the VanGrunsven Trust, which has loaned the company a total of $14.7 million over the last three years, including $7 million just before and after the original Chapter 11 filing, will forgive the latter loans and take equity in return; this move wipes out the equity of employees who participated in the employee-owned stock program in place before the bankruptcy. Van’s estimates that had it entered liquidation instead of reorganization customers might only get 4% of their unsecured claims.
According to Van’s statement, “The filing will be complete after the court sets various hearing dates and the judge signs a certificate making it an official court document. This usually takes 3-5 days. Then, a copy of the officially filed plan is mailed to the same approximately 40 thousand people that were notified at the time Van’s filed bankruptcy. Those people who have claims against the company receive ballots so they can vote either for or against the plan. Votes will be collected by Van’s attorneys, tallied, and reported to the court as it considers whether to approve or reject the plan.”
In addition, Van’s has outlined its corporate reorganization in the filing. “Debtor’s corporate governance board underwent reorganization. Debtor now has a five-person board comprised of two members of the Van Grunsven family and three independent, experienced directors. A more formal and rigorous form of governance is now being practiced. Mr. Van Grunsven serves as board chair. Mikael Via will continue as CEO of Debtor. Debtor has recruited Shawn Ell as Chief Operating Officer. Mr. Ell has a strong background in manufacturing management and will oversee all manufacturing beginning in early April. Don Eisele will continue to serve as Chief Financial Officer until his replacement is identified. Rian Johnson will continue as V.P. of Engineering and Product Design.
“Debtor is also creating the position of V.P. of Quality Assurance. The Plan calls for Debtor to continue building its professional staff to fully support operations. This team will include additional positions in quality control, engineering, accounting, and IT, as well as a stronger marketing and customer relations support. Debtor’s increased professionalism in governance and additional executive personnel, with its depth of experience, coupled with Debtor’s existing skilled, hardworking personnel, provide Debtor with a new level of energy and talent. With that, Debtor is prepared to take advantage of aviation opportunities while being sufficiently profitable to replace its depreciated equipment, install business systems, and repay its creditors as set forth in the Plan.”
In previous statements, Van’s has said that in addition to these manufacturing updates (netting an increase in kits delivered) the RV-15 project’s development continues, though the airplane itself won’t make an appearance at AirVenture this summer.
