The State of Texas in asking the US bankruptcy court to halt the proposed sale of San Antonio-based Emivest Aerospace to an undisclosed buyer, an action set to take place by mid-February. Emivest builds the aircraft formerly known as the Sino-Swearingen SJ30 twin-engine business jet.
"The motion is being presented on shortened notice with a skeletal description of sale terms and no discussion of how existing secured claims will be treated," says Texas attorney general Greg Abbott in the 24 January objection letter to the court. "The buyer has not even been identified yet." The proposed sale and Texas' objections are topics on the agenda for a 31 January court hearing.
According to the letter, Emivest owes the state approximately $900,000 in taxes and liens.
Emivest declared Chapter 11 bankruptcy in October after delivering only two of the $7.25 million jets. Previous owner Sino-Swearingen also delivered two aircraft before selling the company in 2008. During bankruptcy proceedings, Emivest said it had been in contact with "as many as 15 potential purchasers or long-term investors".
Though the company has not stated its intended buyer, a letter of support from SJ30 engine provider Williams International in December revealed the favoured party, at least at that time.
"Together with jet designer Ed Swearingen, my late father conceived and launched this project, and also invested several million dollars in its critical start-up phase," wrote Gregg Williams, chairman, president and CEO of Williams in a 7 December letter to the court in support of Emivest's sale proposal.
Williams identifies the buyer as the Chinese aviation industry general aviation (CAIGA), aka Avic General Aviation, the group that bought the assets of bankrupt Epic Air in April 2010 for $4 million and is currently in the process of purchasing the piston engine business of Teledyne for $186 million.
"As the SJ30's most patient and important supplier, I urge you to accept the CAIGA's bid for the assets of this bankrupt program," Williams writes, adding that CAIGA is capitalized at "roughly $1.5 billion and is committed to investing more than $100 million" to re-establish and improve the SJ30 production line.
Filings by Emivest however do not mention the buyer by name, leaving Texas in the dark.
"Attempts to obtain more detailed information from debtor's counsel have been ignored, with the counsel involved in negotiating and drafting the sale terms refusing to respond to telephone calls or emails requesting to discuss the proposed sale," the state's objection continues. "Due process is being denied."