Should Pieper Retain Eclipse?


Eclipse Aviation’s bankruptcy has been a foregone conclusion for so long that when it actually occurred it was anticlimactic. A few things make it better than average as bankruptcy stories go, and one is current CEO Roel Pieper’s apparently clever (we’ll see) attempt to secure his own approximately $100 million investment and take over the company.My understanding of Chapter 11, Title 11 of the U.S. Code is that it gives the existing operators of the company the breathing space they need (under supervision of the court) to restructure the enterprise to make it profitable.But Pieper’s plan appears to be to ask the court to end the annoying phone calls and lawsuits so his company in Luxembourg can take over and get on with business.That sounds suspiciously like a Chapter 7 liquidation, except that in this case the winning bidder is preordained.In Eclipse’s news release, Pieper says this is best for all concerned, but if I was a creditor or investor I think I’d like to hear how Pieper has reached that conclusion. Now, it’s true that EASA certification and the long-awaited Avio NG 1.5 certification (both central to the success of the aircraft) happened under his watch, but it’s not like they were his ideas.Really, what has the reclusive and media-shy CEO done to actually turn the company around since taking over from Vern Raburn in July? More importantly, what’s he going to do differently when he has the whole ball of wax?There’s value there. The airplane, now that it’s finished, is by all accounts pretty good. The technology and infrastructure in Albuquerque are the best other people’s money could buy. With competent management and the right attitude, Eclipse could be a positive influence in the aviation industry.But is Pieper the right man to pull that off?Maybe the creditors, customers, and, ultimately, the market should decide. Maybe the court should simply order Eclipse’s liquidation, and we’ll see just how serious Pieper is about saving it.