Eclipse was holding steady last week that the furlough of 800 employees was temporary and necessary because of an unexpected slowdown in negotiations regarding the company’s sale. EclipseJet Aviation International Inc., owned mostly by ETIRC Aviation, is awaiting court approval to buy Eclipse Aviation. Money for the buyout has reportedly already been approved, but the holdup, according to Mike McConnell, president of Eclipse’s customer division, is a byproduct of the global financial crisis. To some, that may imply that establishing the existence of the approved funds may have created complications. For the deal to work, investors together will need to see the company that accrued an estimated $1 billion in debts and liabilities as worthy under new management of $160 million in new notes. That — along with a $28 million infusion from EclipseJet and equity offerings for the largest note holders — would win the company a new beginning free of the aforementioned $1 billion debt. In the meantime, Eclipse bosses maintain that furloughed employees will receive their next check and retain benefits. The move, according to McConnell, is “not a layoff” and should be “short-term.”
Industry watchers are quick to note that for Eclipse to survive, it will have to find investors interested in shaking off the realities of a world crippled by failed investments, extremely unsettled credit markets and a surge in “where’s my mattress” financial planning. It will also take faith in a yet to be fully operational design. Eclipse filed for Chapter 11 bankruptcy last November. The deal currently pending was struck in January. Best that we can tell, the company that once had about 1700 employees is currently operating on a skeleton crew of about fifty people tasked with keeping track of the company’s assets.
