On March 4, light sport airplane manufacturer Icon Aircraft and three affiliated debtors filed a voluntary petition for relief under the U.S. Chapter 11 bankruptcy code at the United States Bankruptcy Court for the District of Delaware. The affiliated debtors include Rycon, IC Technologies, and Icon Flying Club. Icon manufactures the A5 amphibious light sport aircraft.
As part of the restructuring process, Icon Aircraft is seeking to sell itself while “continuing to support its customers and operations,” according to a company statement. It has arranged for debtor-in-possession financing “to fund post-petition operations and costs in the ordinary course, including honoring commitments to customers and vendors and fulfilling obligations to all employees.”
“We plan to continue to produce and sell aircraft, and provide first-rate service, training, and support to our customers,” said Icon CEO Jerry Meyer. “We believe this process will enable the business to address its current challenges and emerge with new ownership—stronger than ever—and continue building amazing planes with a focus on innovation, safety, and incredible flying experiences.”
In the bankruptcy filing, Icon’s largest creditor is East West Bank, holding $65 million in unsecured claims. Other creditors among the 30 largest include Toray Advanced Composites ($213,441.83); Solano County, California ($56,619), location of Icon’s Vacaville Airport headquarters; Garmin ($34,631.25); and Beringer Aero ($22,927.76).
A list of equity security holders with more than 10 percent of any class of Icon’s equity interest includes PK Investment, PK Capital, PKA, SH Eternal, Bansk II, Nanshan Group, Yamaha Motor, and Shanghai Shunxin Enterprise Management Consulting. Among other equity security holders are Icon co-founders Kirk Hawkins and Steen Strand; Vern Raburn, founder of Eclipse Aviation; technology pundit Esther Dyson; Ray Dolby 2002 Trust B; and many other individuals and entities.
Icon plans to “maintain open lines of communication with its customers, suppliers, employees, and other stakeholders to ensure transparency and provide updates on critical developments” during the bankruptcy process. “The purpose of the Chapter 11 filing,” Meyer explained, “is to resolve the company’s financial challenges and position the A5 for success for years to come. We understand that this situation creates a hardship for everyone involved. However, without taking these steps, there is not a viable path forward for the business to do what we do best—build incredible airplanes and support our aircraft owners.”