HISTORY
Eclipse Aviation Corporation
an Albuquerque, New
Mexico-based manufacturer of the
Eclipse 500
very
light jet (VLJ) and also
proposed developing the Eclipse 400
single-engined jet.
The
company was founded in 1998 by
former Microsoft employee Vern
Raburn. Due to Raburn's relationship
with Microsoft, Bill Gates was a
major stake-holder in the Eclipse
project.
Production of the Eclipse 500 was
halted in mid-2008 due to lack of
funding. The company entered an
unsuccessful Chapter 11 bankruptcy
in November 2008, which was
converted into a Chapter 7
bankruptcy liquidation procedure in
February 2009. In the final Chapter
7 procedure, completed on 20 August
2009, there was only one bidder, a
new company formed to acquire the
assets, Eclipse Aerospace.
Eclipse operated service centers at
Albuquerque, Gainesville Regional
Airport, Florida and at Albany
International Airport, New York.
Startup and growth
Eclipse Aviation was founded by Vern
Raburn in 1998 in Scottsdale,
Arizona and the company started to
design the twin-engined Eclipse 500
very light jet. Due to investments
by the State of New Mexico and
incentives and concessions from the
City of Albuquerque, the company
decided to set up its production
facilities there and moved its
headquarters in 2000.
Construction of the first prototype
started in 2001 and it first flew on
26 August 2002. Originally powered
by two Williams International EJ22
turbofans these were found to be
unsuitable and the aircraft was
redesigned to accommodate a pair of
Pratt & Whitney Canada PW610F-A
turbofans. The engine change caused
a delay in the programme and the
PW610F-equipped prototype first flew
in 2004. The aircraft was FAA
certified on 27 July 2006 and the
first customer aircraft was
delivered in January 2007. European
Aviation Safety Agency certification
for private use was achieved on 21
November 2008.
In
February 2006 the company was named
the winner of the Collier Trophy for
2005 by the National Aeronautic
Association for its work with the
Eclipse 500.
The award was controversial because
only the prototype aircraft was
flying.
On 23
July 2007 at AirVenture in Oshkosh,
Wisconsin Eclipse unveiled the
already flying prototype of a second
company design initially called the
Eclipse Concept Jet.
The four-seat aircraft was powered
by a single Pratt & Whitney Canada
PW610F turbofan and was built in
secrecy at NASA's Wallops Flight
Facility in Virginia by Swift
Engineering and Basis. The ECJ
had first flown on 2 July 2007 and
the company said then did not intend
to place the aircraft into
production but by May 2008 it began
to take orders for a production
version designated the Eclipse 400.
In
October 2007 the company laid-off
between 100-150 contract workers and
employees, about 10% of its
workforce. In November 2007
subcontractor Hampson Aerospace,
which built the tail assembly for
the Eclipse 500, filed a suit
against Eclipse alleging that
Eclipse had not paid them for work
completed.
During
2007 Eclipse had produced 104
aircraft and claimed a record for
building its "first 100 airplanes
faster than any GA jet aircraft
manufacturer in history."
Financial
challenges and decline
Founding
President and CEO Vern Raburn
resigned as a condition of a
financing package by European
Technology and Investment Research
Center (ETIRC) Aviation, which had
invested more than USD 100 million
in Eclipse in 2008. Raburn announced
his resignation at AirVenture on
Monday 28 July 2008. The new
CEO, Roel Pieper, the chairman of
the board of directors and president
of ETIRC, said that the company
should be profitable by the first
quarter of 2009.
Despite
orders for the aircraft, the company
announced in August 2008 that
development of the Eclipse 400 was
on hold and it had not started the
certification process. The
company declared it had not spent
any of the deposit money for the
Eclipse 400 but the deposits were
later a subject of legal action.
On
Wednesday 20 August 2008 Hampson
Aerospace closed their Grand Prairie
production plant, leaving Eclipse
without a supplier of tail sections.
On 22
August 2008, Eclipse announced that
it would be laying off 650 of its
workforce of 1800 people (38% of its
work force)
and a week later Pratt & Whitney
Canada repossessed 24 engines sold
to Eclipse.
From
August 2008 onwards a number of
customers filed law suits against
the company for failure to return
deposits for cancelled and delayed
orders. The company indicated that
due to lack of funding it was not in
a position to return deposits.
On 19
September 2008 Eclipse's largest
customer, DayJet, representing 1400
orders for the Eclipse 500, ceased
flying operations for financial
reasons.
Eclipse Aviation announced on 23
September 2008 that it would
establish a factory in Ulyanovsk,
Russia to assemble the Eclipse 500,
but then halted production of the
500 in October 2008, with the
company indicating that it lacked
funds to continue production or
refund customer deposits.
Bankruptcy and liquidation
On 21
November 2008, the company announced
that it had achieved EASA
certification for the 500 and then
just four days later, on 25 November
2008, filed for Chapter 11
bankruptcy protection.
The company was "seeking court
approval for debtor-in-possession
financing and procedures for the
sale of substantially all of its
assets under Section 363 of the U.S.
Bankruptcy Code." The company also
stated that it had found a buyer for
the company's assets, EclipseJet
Aviation International, an affiliate
of ETIRC Aviation, the company with
major investments in Eclipse.
Bankruptcy documents indicated that
a total of USD 702.6 million was
owed and the court documents filed
indicated that the bankruptcy
occurred because the company
"continued to lose larger than
expected sums of money on each
aircraft manufactured and has not
reached cash flow positive in its
operations." Total company
liabilities were estimated at over
USD 1 billion. At the time of
bankruptcy filing on 25 November
2008 Eclipse had delivered 259
EA500s.
On 20
January 2009, Federal Bankruptcy
Court Judge Mary Walrath verbally
approved the sale of the assets of
Eclipse Aviation to EclipseJet
Aviation International headed by
Eclipse Aviation's chairman, Roel
Pieper, under Section 363 of the
United States Bankruptcy Code.
EclipseJet Aviation International
was unable to secure the funding
they had anticipated and on 24
February 2009 a group of companies
to whom Eclipse owed money applied
to the court to force the unfinished
Chapter 11 proceedings into Chapter
7, a move supported by the company
management.
After a
lengthy Chapter 7 process running
from March to August 2009, there was
only one bidder for the assets of
the company. Eclipse Aerospace,
headed by Mike Press and Mason
Holland, offered US$20M in cash and
US$20M in new promissory notes,
stating that they would locate the
new company in the existing Eclipse
facilities in Albuquerque. Eclipse
Aerospace plans to provide upgrades
to the current Eclipse fleet and
will assess whether production can
be restarted at some future point.
Eclipse Aerospace was confirmed as
the new owner of the assets of the
former Eclipse Aviation on 20 August
2009 and opened for business on 1
September 2009.
Source:
Wikipedia
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