Very-light jet developer Adam Aircraft has filed for Chapter 7 bankruptcy liquidation, but its assets could soon be acquired another company.
“There has been significant interest demonstrated,” says Jeffrey Weinman, trustee for the bankruptcy case. “I would anticipate that the company’s assets will be sold or auctioned within 30 days.”
The Denver, Colorado-based manufacturer of the A500 piston twin and developer of the A700 VLJ suspended operations on February 11, laying off all of its 800 employees after sending one third home on January 17.
Company officials had hoped to cut costs and line up at least $75 million in investment to continue producing the A500 and to earn certification for the A700 this year.
© Adam Aircraft
According to Adam's court filing, the board of directors met on February 11 to accept the resignation of chief executive John Wolf. The company filed for Chapter 7 liquidation on February 15 after failing to secure additional funding.
The bankruptcy filing list assets worth as much as $10 million and liabilities of $50-$100 million. The court quickly demanded a statement of financial affairs and warned the case could be thrown out if its not provided by March 3.
The senior secured lenders are Bank of America, Bear Sterns Asset Management, Drake Offshore Master Fund, Kenmont Investments Management, Morgan Stanley, Ore Hill Fund, Permal Capital, Platinum Grove Asset Management, Sandler Capital and Spectrum Investment Partners.
Adam’s 800 former employees are being actively recruited in job fairs across the Denver area by Bombardier Learjet, Gulfstream and Cirrus Design. The 50 former employees of Aviation Technology Group, the bankrupt developer of the Javelin VLJ that was also based at Denver’s Centennial Airport, are also being recruited.