Commander Files for Chapter 11 Protection

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Commander Files for Chapter 11 Protection

Restructuring Planned...

Commander Aircraft Company, a manufacturer of high-performance single-engine aircraft, filed for Chapter 11 bankruptcy protection in federal court in Delaware last Friday. Wirt Walker, CEO of Commander's parent company, Aviation General Inc. of Bethany, Okla., told AVweb on Tuesday that operations at the company "will be going on as usual." He said he is entertaining talks from parties interested in merging, acquiring, refinancing, or restructuring the company. "All options are open," he said. "It's a small company, and pretty neat and tidy ... it's not overburdened by debt, we just got caught in a cash crunch." He also noted that the last two years of a weak economy have been tough. He said the company has already cut back on staff, but he doesn't foresee any additional layoffs due to the current situation. "We want to do what's best for the company, for our shareholders, and our creditors," Walker said. The company has been owned by Aviation General since 1998. Commander Aircraft Company was incorporated in 1988, and acquired the Commander single-engine product line from Gulfstream Aerospace Corporation, which had acquired Rockwell's General Aviation Division in 1981. The company headquarters and factory are located at Wiley Post Airport in Oklahoma City.

...As Orders "Virtually Hit The Wall"

In a Dec. 27 news release, the company said it has about $3.7 million in total net indebtedness, and "has been working amiably with its creditors and vendors." However, orders for new and used aircraft softened significantly in the third quarter of 2002, and "have virtually hit the wall recently," the statement said. The Chapter 11 filing was prompted by "an immediate cash flow shortage of approximately $1 million," which ensued when several expected orders for aircraft "failed to be consummated." The statement said the company intends to continue its operations during the reorganization, including support for existing aircraft and limited production of new aircraft built to order. The company needs to sell 10 to 12 new aircraft per year to break even, the statement said, but expected to deliver only seven for 2002. The weak economy, the decline of market values, and anxieties over war and terrorism all contributed to the company's lack of sales, the statement said, along with budget constraints that limited marketing and advertising efforts.