Epic Air Update: U.S. Builders, Chinese Reach Deal
Updated On: Apr 08 2010 02:19:18 AM CDT
It might have seemed all but impossible a week, a month or six months ago, but it's looking more likely that production will resume in Bend of the Epic LT kit airplane - if a deal with the landlord, owed months of lease payments, can be worked out.
The latest big step forward came Wednesday, back in U.S. Bankruptcy Court in Portland, where a tentative agreement was reached between top bidder China Aviation General Aircraft Co. Ltd. and LT Builders LLC, a group of seven plane builders whose aircraft, in various stages, remains locked up at the big, idle factory by Bend Airport.
The deal, hammered out in around-the-clock negotiations, came just a day before a midnight Thursday deadline set by Bankruptcy Judge Randall Dunn. If it had not happened, the judge said the bankruptcy plane-maker's assets would have gone to Kansas-based Harlow Aerostructures, the second-highest bidder, who also wanted to resume plane manufacturing in Bend.
As outlined for Bend city councilors Wednesday night, the agreement changes the deal to provide that LT Builders acquires all the physical assets related to the LT Aircraft, as well as the debtors' intellectual property, and will be the entity that buys the assets from the debtor trustee.
While LT Builders will retain ownership of property related to the LT aircraft, it will transfer other physical property to the Chinese firm, as well as the license to all intellectual property - in other words, what remains in Bend is the ability to produce more Epic LT planes.
As reported by The Oregonian, LT Builders gets the rights to build the plane in North America, while the Chinese are licensed to make and sell them elsewhere in the world.
But there's a rub - an agreement needed with the factory's owner, ER1, regarding the lease. Councilors were told that the judge on Wednesday strongly encouraged LT Builders to reach that agreement, giving them 30 to 60 days to try to work out revisions to the lease.
The bankruptcy judge still must approve the deal, but Daryl Ingalsbe, a pilot and businessman helping manage the LT Builders, was ecstatic leaving Wednesday's meeting.
"We did it!" he told the Portland newspaper. "We kept control of this wonderful company in the United States."
But Ingalsbe said he's unable to say yet how many people the reborn factory will hire in Bend, or when operations will resume, claiming the landlord, ER1, "is holding Bend hostage."
Down the road, if all goes well, LT Builders hopes to turn its kit aircraft, which a buyer must build about half of, into a full-complete, FAA-certified aircraft that would be mass-produced.
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