Eclipse Creditors Want Chapter 7
A group of creditors involved in the Eclipse Aviation bankruptcy have asked the courts (read the motion in this PDF file) to liquidate the company as quickly as possible. The Ad Hoc Committee of Secured Noteholders has applied to the Delaware Court that approved the Chapter 11 filing and subsequent sale of Eclipse to a subsidiary of ETIRC Aviation to convert the proceedings to a Chapter 7 liquidation. The noteholders claim that the financing for ETIRC's purchase of the assets has fallen through and that every day that goes by reduces the asset pool that will be available for them. "The debtors are administratively insolvent and expenses continue to accrue, thus eroding the limited values that are available for distribution to creditors," the application reads.
The court approved the sale of Eclipse Aviation's assets to EclipseJet, the ETIRC subsidiary, on Jan. 23. The noteholders' application claims that ETIRC President Roel Pieper promised that the purchase, to be financed through a Russian bank, would be complete by Jan. 30. The bank became insolvent but the Russian government promised to bail it out. However, after the bailout, the money for the Eclipse purchase still wasn't forthcoming. On Feb. 18, Eclipse indefinitely furloughed its employees and the creditors claim that Pieper's further assurances that the promised money was on the way did not materialize. Discussions continued until Monday and the creditors decided to pull the pin on Tuesday. "It seems to the Ad Hoc Committee that there is no longer any probability that the financing will occur," the application reads.