Adam Aircraft Shuts Down

[wes616]

http://www.bizjournals.com/denver/stories/2008/02/11/daily15.html

This is really too bad. I have heard through the grapevine that they completed several major milestones last week for the A700.



Wes C.
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[samplesecond]

disappointing indeed

 

[berkshire]

The news gets worse,

ADAM AIRCRAFT FILES FOR CHAPTER 7
Adam Aircraft Industries on Feb. 15 filed for Chapter 7 under the federal bankruptcy code. The U.S. Bankruptcy Court in Denver has appointed a trustee, Jeffrey Weinman of Denver, to oversee the case. Workers began attending job fairs Monday with several companies, including Piper Aircraft, Honda Aircraft, Gulfstream Aerospace, Epic Aircraft, Cirrus Design, Bombardier Aerospace, and others. A meeting of creditors is scheduled at the U.S. Bankruptcy Court in Denver on March 12. An attorney working on final details of the bankruptcy said the debt of the company is "closer to $100 million." She also said the trustee on the case has raised the estimate of the company's assets to "$10 million to $50 million."

 

[tbuelna]

For anybody out there with more money than brains, and who thinks they are going to make a killing selling business jets to rich executives (ie. the management of Adams, Safire, Eclipse, Spectrum, ATG, Sino-Swearingen, Diamond, Grob, etc.), just two words of advice: CASH FLOW. It will take you several YEARS to design, build, test, certify and put-into-production a certificated aircraft. And you will need enough free cash flow to support your business during this period, or you will go bankrupt.

The only VLJ start-up of the last few years, that has not gone belly-up (yet), is Eclipse. And they have burned through over half a billion dollars to date, and the product they have managed to delivered so far is sub-standard and likely to be recalled. The only reason Eclipse is even still in business is that they have some very wealthy individuals backing them. They claim to have orders for over 2600 aircraft at $1.4 million each, but they don't have the cash available to keep the company going day-to-day, while they build and deliver those 2600 aircraft.

Sadly, good engineers are usually poor business men.

 

[ewh]

Sino is still hanging on by the skin of their teeth.

Believe it if you need it or leave it if you dare. - [small]Robert Hunter[/small]

 

[Sparweb]

One billion dollars in orders, but no cash to complete certification and produce? Were they not taking down payments?

Steven Fahey, CET

 

[GregLocock]

I vaguely remember that you can't use deposits as research funding, they have to be held in escrow.

Cheers

Greg Locock

SIGlease see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[thruthefence]

Word is, MD helicopters, formally Hughes, ( Summa corp ) is looking at Adam. I hope someone picks it up.

 

[berkshire]

BID MADE FOR ADAM AIRCRAFT
Last week a $10 million bid was made to purchase Adam Aircraft Industries, former manufacturers of the A500 twin-engine piston aircraft and A700 twin-engine jet that filed for Chapter 7 bankruptcy in February. The bid comes less than two months after the Denver-based company filed papers for bankruptcy, citing an inability to secure $30.5 million of additional financing for the certification of the A700. A trustee in the bankruptcy case agreed to sell Adam Aircraft to an entity called AAI Acquisition Inc., which is said to have made the only qualified bid. Paul Zarnowiecki at Orrick, Herrington & Sutcliffe LLP in Washington, D.C. was listed as the contact person. A hearing for approval of the sale is scheduled for Wednesday.
B.E.

 

[wes616]

As I hear it, they are russian private equity.

Adam is supposed to start back up before may 1. Work on the A700 only. From there they will, supposedly, begin prelim design of the A1000 (regional jet).

Wes C.
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[dalcazar]

I'm not surprised that the VLJ companies are going belly up. The concept itself has always seemed flawed to me when you have turboprops that will fly as fast and as far with more efficiency. In the end it might only be the big companies like embraer and cessna that reap the lions share of what I think is a made-up market.

I would be very sad to see the A500 never get made, put a pair of PT-6s in that and you have something really cool, there goes another rutan design with promise down the production drain as well. If only they would put the boomerang into production...

 

[ewh]

? Adam is not a VLJ company.

Believe it if you need it or leave it if you dare. - [small]Robert Hunter[/small]