Van’s Expects 70 Percent Buy-In On Price Increase

Representatives of Van's Aircraft told an Oregon bankruptcy court they expect about 70 percent of existing customers to accept a price increase (reported to be 30 percent) on the parts they have on order with the company. Company officials and lawyers were in court on Thursday to begin the process of moving the company into Chapter 11 reorganization. They dealt mainly with procedural issues and answered numerous questions from the judge in the case. Another hearing is planned for Dec. 19 where more decisions on the process going forward are expected. In the meantime, the court agreed to allow Van's to continue basic business operations, including manufacturing and delivery of ready-to-ship kits and parts.

A major part of the reorganization is restoring profitability from the sale of parts and structures, and there are more than 3,500 orders, placed by more than 1,500 customers, that will be subject to a price increase. In its filings before the court, Van's has proposed that existing customers be allowed to accept the price increase and continue receiving parts. If they reject the price increase, they could forfeit the deposits they made on those parts and end up in the large pool of unsecured creditors to recover their money, or a portion of it, through the bankruptcy process.

The enormity of the case has sent ripples through the GA industry, and both EAA and AOPA say they are keeping a close eye on the developments. "Van’s is doing everything it can to continue operations and return to profitability," EAA said in a statement to AVweb. "EAA is going to respect that process as they move it forward." AOPA urged members who are Van's customers to keep track of the proceedings.  AOPA stresses that if you have dealt with Van’s in the past, "you need to be watching for any notices or claim deadlines," AOPA said in a statement to AVweb. "If you do not comply with the notices or deadlines, you could lose any opportunity to recoup costs."