If Vans is the actual customer on paper, then Lycoming certainly won't comment to you or any other individual about what may or may not be happening with their true customer. Privacy rules and all that.
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Engine Deposit info
- Thread starter FlyGuy65
- Start date
If Vans is the actual customer on paper, then Lycoming certainly won't comment to you or any other individual about what may or may not be happening with their true customer. Privacy rules and all that.
It also would not surprise me if some engines are being diverted to foreign drone builders.
Exactly what I have been thinking
There’s been a rash of engine thefts suspected to be going to this type of market..
Ordered my Thunderbolt engine March 2022. Just received a call from Chris Gayman this morning that they scheduled my build for next week with proposed shipment 10 days later. He also confirmed as others have mentioned that they do not receive any deposits from Vans. We pay Vans deposits followed by remaining amount after before engine is shipped, Vans deals separately with Lycoming as an OEM.
Well, let's hope Van's have your deposit to give them. In the circumstances I would probably be looking to get both parties on the phone to reach an amicable solution around the payment method. Wiring a big lump of money to Van's on trust is not an appealing prospect right now.
Maybe I am too trusting. My engine was ordered about the same time and if they call me tomorrow I will be wiring the money within a few days. Vans is in a tough spot but I think they have earned my trust enough that if they tell me they need the rest and that my engine will be built and shipped I would believe they are not trying to rip me off and will live to their end of the bargain. Further, I take this call as a good sign that all the hand wringing and gnashing of teeth about the engine deposits might have been premature, like much of the conversation on here about LCPs.
But hey, that’s just me…
But hey, that’s just me…
Peter, what engine is it and what was the estimated date of delivery when you made your deposit on it?
I ask because I ordered a TB IO-540 about the same time as you and the estimated delivery is 5/2024.
That date is fine by me and I let them know that. Has the engine been holding up your build and did you convey that to them?
Dan 57
Well Known Member
whoaa, that is one hot potato to handle at the moment... a month ago I asked Anne B. from Van's to wire my deposit to Lycoming TB, as I thought the rest payment would be made directly to them...
A request for clarification from Lycoming was sent 2 weeks ago for nil response as of today.
I make no suggestion whatsoever that anyone would be trying to rip you off.
But when businesses get into cashflow trouble, unfortunate things can happen. Accounts Receivable keep collecting payments from customers because that's what they're being asked to do. On the other side of the office someone in Accounts Payable gets a quiet instruction to delay a payment until next week to help ease the cashflow going into the weekend. Then, if the music stops, someone (a customer) has no pants on.
People's attitude will vary with the level of trust they have (longstanding customers will doubtless have more trust than those who have only experienced the last few years with Van's). I suspect it may also vary based on levels of personal wealth: for some an engine payment may be an amount they're happy to risk, for others it may be the single largest cash sum they have ever transferred.
I get your point, but it has been made clear that Van himself stepped in and prevented any customers from losing their pants. And now they have a new management team and business rescue consultants on hand to make sure it won’t happen.
I expect changes at the end of this, and I fully expect Van’s Aircraft will survive. But it would be much harder if customers lose deposits. And if they collected full payments from folks and then didn’t deliver you might as well just close the doors.
I don’t see it happening.
I expect changes at the end of this, and I fully expect Van’s Aircraft will survive. But it would be much harder if customers lose deposits. And if they collected full payments from folks and then didn’t deliver you might as well just close the doors.
I don’t see it happening.
I placed my order in February 2022 and was just told that I could expect my engine (Thunderbolt IO-540) in March
Majorpayne317641
Well Known Member
It may be because the store is shutdown right now?
I think the store has only been shut down a day or so. I'm talking about long-ordered engines.
SantosDumont
Well Known Member
The timeline I was given for my IO-390 was Jan 5 2024. Already paid the 25% deposit. Waiting to see what happens.
So far I have had no comms since June 2023 when I wanted to confirm that the timeline was still January 2024.
So far I have had no comms since June 2023 when I wanted to confirm that the timeline was still January 2024.
Carl Froehlich
Well Known Member
As I’m still waiting on my engine (ordered May 2021) I’m now looking at other options.
Anyone know if I can get my deposit back?
Carl
Anyone know if I can get my deposit back?
Carl
KatanaPilot
Well Known Member
Good luck with that. I guess it depends on the terms of the "contract" you made when you sent in the deposit.
There is a (now former) Van's customer who ordered an S-LSA RV-12iS. When the October 27th announcement was made, he decided to cancel his order (the same day). He requested the refundable portion of his deposit and was apparently told no. As a result, he took his concerns to another forum (I can't mention the forum per the rules) and was successful just a few days ago in getting the desired result. He doesn't actually have his refund in hand, but said he is prepared to return to the same forum to do whatever is required to get his refund.
cactusman
Well Known Member
"12. Customers with orders related to aircraft engines, propellers, avionics kits and parts orders will be similarly invited to the portal and presented offers for revised purchases. The financial details of these orders are under review. These will be communicated to the applicable customers once the terms and pricing for those offers to renew have been finalized."
From the Motion to Reject Customers Contracts
I expect that is why Lycoming has been very quiet. Our deposits will be safe provided we agree to pay the increased pricing I suspect.
I guess if you got your engine already you won the prize.
From the Motion to Reject Customers Contracts
I expect that is why Lycoming has been very quiet. Our deposits will be safe provided we agree to pay the increased pricing I suspect.
I guess if you got your engine already you won the prize.
If this is how it works… here’s a Data point. I’m rounding with deep breaths
Thunderbolt Lycoming Dual PMAG
IO-360-M1B promised $42k
Deposit $10k
Balance $32k
I’ll be invited back to
Io-360-M1B $55k
Deposit $10k
Balance $45k
I might as well walk away and buy a Vanilla Lycoming. It will be cheaper
Here’s my proof I’m actually affected see attached
Thunderbolt Lycoming Dual PMAG
IO-360-M1B promised $42k
Deposit $10k
Balance $32k
I’ll be invited back to
Io-360-M1B $55k
Deposit $10k
Balance $45k
I might as well walk away and buy a Vanilla Lycoming. It will be cheaper
Here’s my proof I’m actually affected see attached
Attachments
I am trying to mentally prepare for this eventuality, but I don't understand how/why Van's would demand more for an engine who's price has already been agreed to by Lycoming at the time of the order/deposit.
When Van's previously alerted us to impending engine price increases, it was clearly because Lycoming was raising their prices. Perhaps Van's now needs to reap more from their cut of the resale of the engine, but that shouldn't be nearly as big an increase as those made by Lycoming since the time of the order.
One can hope.
Easy…contract is old price, your new contract is new price.
They can’t honor old contracts because of Chapter 11.
I’m guessing Lycoming doesn’t want to sell engines at old prices. So you’ll be paying current prices unless Lycoming creates a special price contract for affected customers. They can only do so much that is in line with their financials
They can’t honor old contracts because of Chapter 11.
I’m guessing Lycoming doesn’t want to sell engines at old prices. So you’ll be paying current prices unless Lycoming creates a special price contract for affected customers. They can only do so much that is in line with their financials
I assume you're responding to my prev post.
Paying Lycoming more for an engine doesn't help Van's at all. Lycoming isn't in Chapter 11 so I don't see how Van's Chapter 11 means Lycoming (their vendor) gets MORE than the contracted price. Usually works the other way around and it seems very contrary to the purpose of Chapter 11.
Look at it from Van’s perspective. Your deposit has been used by Van’s. So even if Lycoming honors the original price Van’s now needs to charge you enough that your deposit is there profit margin. That way they can pay Lycoming the original price with no additional cash.
Oliver
Oliver
NavyS3BNFO
Well Known Member
I ordered my engine and put a deposit down in March '22. I searched the filing "Motion to reject customer contracts unless new terms agreed" for my name and it wasn't there. Anyone who has an aircraft kit on order and presumably paid a deposit, their name is there. My sense is those of us with engine orders and deposits are not on that list. I can't tell you what that means, it's just an observation.
If anyone else with an engine on order and who paid a deposit finds their name on the list, let us know.
If anyone else with an engine on order and who paid a deposit finds their name on the list, let us know.
This is a great point, as are many of the other points made in this thread. The question that I have is who is representing the interests of the 3,500 of us listed in Exhibit 2 of the motion to reject customer contracts?
Clearly Van's has excellent representation, and I'm sure Lycoming does as well, but what about the rest of us??
Can you guide us where/how to access that info.
NavyS3BNFO
Well Known Member
Let's see if this works. It's also linked by bmellis11 in the main thread. Ignore the funky look. When you click on it, it should load.
View attachment Motion to reject customer contracts unless new terms agreed.pdf
View attachment Motion to reject customer contracts unless new terms agreed.pdf
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My assumption is that Van's would pay Lycoming the old contracted price and you would have to pay Van's the new price.
Van's would essentially be scalping you on this deal to help with their overall cash position, even though the individual deal is essentially a pass-through and would remain profitable to them at the old price.
Chapter 11 is not without controversy. It is often abused.
I ordered around the same time and my name IS on the list. BUT, I ordered finish kit, engine, and prop all at thee same time. I have received the prop, but not the engine or finish kit. Perhaps my name is on the list only because of the finish kit? Maybe they intend to file the list of engine orders only after they finish negotiating with Lycoming??
I see in the "Voluntary Petition". that their single largest unsecured creditor is in fact Lycoming to the tune of $598,323.00. Unclear if this represents the total amount of outstanding deposits, or if this is just the amount owed for orders delivered or what?
In my opinion, it would be helpful if someone were able to file a motion with the court on behalf of us customers asking for clarification on the nature of the relationship with Lycoming and the status of those orders.
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Thanks for the attachment: I also have put down an engine deposit, but my name does not appear.
On an unrelated issue, I am waiting on outstanding parts missing from my Finish kit and they are substantial. I would think that would put me on the creditor list.
KatanaPilot
Well Known Member
Not even close.
Indeed. That number will represent engines that Lycoming has shipped to Van's or Van's customers but that Van's has not paid Lycoming for.
Barely 20 engines. That's sounds reasonable as a point where, payment not being forthcoming, Lycoming might stop shipping.
cactusman
Well Known Member
I think that motion appendix 2 only contains kit order folks at this time. I suspect if this motion is approved by the court - a subsequent filing that contains the names of folks with engine, prop and avionics deposits will be coming next. It's interesting because technically our order was with and through Vans for a Lycoming engine at a set price. Lycoming is not in bankruptcy and set those prices and confirmed those orders in addition to the Van's engine order department.
Can Vans and Lycoming get the BK Court to buy off on a motion to raise engine prices 10-20 or more percent in this scenario? I guess we will all find out. Not sure whether my 15k is gone or not at this point in time. I know i will need an engine....is it better to cut losses and hire Barrett (or someone else) to find a good core and build me one?
I suspect that next dance might be a difficult one for both Vans and Lycoming. 200-300ish engine order deposits at $10-15k each is a substantial amount of $.
I actually think this piece will be the hardest for Vans to work through in this whole thing imho.
Dan 57
Well Known Member
Same here...
Question guys, is anyone here in contact with Lycoming?
I sent a query mail about a month ago to all the addresses ([email protected], [email protected], [email protected], [email protected]), nil reply
DavidP2020
Well Known Member
Same here...
Question guys, is anyone here in contact with Lycoming?
I sent a query mail about a month ago to all the addresses ([email protected], [email protected], [email protected], [email protected]), nil reply
I talked with Chris at Lycoming this morning. He knows Lycoming and Vans are in communication, but does not know the details being worked out. So, Chris is working the list of who gets their engines next, but is not in the finance loop at this point.
In an earlier conversation, he confirmed that Lycoming does NOT hold our deposits; those are with Vans.
- It appears Vans is not proposing to cancel engine contracts NOW. But, it seems possible, as a previous poster mentioned, that over the next month or two, Vans may submit a list of people with engines, prop, or avionics deposits to the court to cancel those contracts like they are doing with kits.
- There are some indications Vans is honoring deposits. They are doing this with kits and there is a line in the proposed Ch.11. budget for $180,000 in payments to Lycoming for "honoring engine deposits". This is likely only 10-15 engine deposits, but may be an indication of how they MIGHT deal with subsequent engine deposits.
- I believe Vans has a small mark-up on Lycoming engines. The question to be determined is if and how much they raise the cost of engines (their markup) to those of us who have them on order. Sounds like we may find this out by mid-Jan.
I assume that if engine deposits had been held in (a 3rd party) escrow, they would be protected from all this mess. And I don't suppose Van's actually isolated engine deposits in any way, treating that money (via bookkeeping) as if in escrow.
But if they did, does anybody here know (really know) how that would be treated in Chapter 11? Would the court honor that treatment and allow its use only for the engine orders as advertised, or would they force Van's to mix it in with other assets to distribute to all creditors?
But if they did, does anybody here know (really know) how that would be treated in Chapter 11? Would the court honor that treatment and allow its use only for the engine orders as advertised, or would they force Van's to mix it in with other assets to distribute to all creditors?
So you mean I would have to pay Vans current price 55k
Vans would pay 42k (old price) to Lycoming
Vans has my 10k deposit already and I need to pony up 45K
So Vans would need 45K from me plus the 10K they lost to pay Lycoming 42K?
I just don't think there's any relevance between Lycoming's price increases and what Van's renegotiates with us. A lot of us bought our engines early to avoid impending price increases at Van's recommendation. That's not to say our cost won't go up, but I would think that increase would be proportional to Van's increased operating costs applied just to Van's mark-up, whatever that is.
One thing that strikes me is when engines went up last June, Van's announced it by stating "Lycoming has published new engine prices." Almost as if Van's has no say in the new price (and perhaps their mark-up is a fixed %.)
I suppose it's possible the renegotiated contract could end up being as much or even more than Lycoming's current prices, but that just doesn't make sense to me ... I guess we'll all find out pretty soon.
DanNiendorff
Well Known Member
The documents are pretty clear that deposits prior to October were used as working capital and not segregated. They are also clear that the current motion to alter contracts does not include the engine /prop deposits, but that a future motion will be made to alter those contracts. So those with only an engine deposit are not on the current list, but will be on a future list…. I think the pro forma line item to “honor deposits” to Lycoming and Hartzell speaks to vans intent to do just that to the extent possible. How much of a price increase and deposit reduction? Who knows….. how long to work it out? Who knows…. It seems optimistic to think Vans will emerge from court protection in 13 weeks. Not because they don’t want to, but because attorneys for all the creditors will need to agree……. And I suspect that will take much longer.
He means nothing because he is straight up speculating, and has been stirring the pot on Vans' plight for months, taking every opportunity to whip up a lynch mob.
I have unfortunately been on the wrong side of a Chapter 11 to the tune of 6 figures. It sucks for everyone, but Vans has already offered the olive branch of honoring current deposits in full towards updated kit pricing. They don't have to do that.
To imply that they lack integrity and will take this opportunity to rip off builders is ridiculous and inflammatory. Worst case, you might have to pay full retail for your Lycoming which changes nothing as you need an engine no matter what, and there are NO cheaper options out there for brand new anyway.
At a minimum, I hope that Van's would pass on the Lycoming wholesale price to us who are affected and forfeit their profit margin at this point. Without knowing the Van's engine markup, we don't know how much of the 25% deposit represents Van's portion.
To this end, perhaps Lycoming would be willing to pass on the agreed upon wholesale price at the time of order to those affected? I mean, they would still get all the same cut whether they deal with us at wholesale rates or deal with Van's.
Also, since most (all?) of us paid deposits using a credit card, does credit card insurance cover non-delivery of contracted goods? Has anyone tried getting a refund through this route?
To this end, perhaps Lycoming would be willing to pass on the agreed upon wholesale price at the time of order to those affected? I mean, they would still get all the same cut whether they deal with us at wholesale rates or deal with Van's.
Also, since most (all?) of us paid deposits using a credit card, does credit card insurance cover non-delivery of contracted goods? Has anyone tried getting a refund through this route?
N804RV
Well Known Member
Yeah, I made the final payment for may Hartzell prop on October 6th. Was told then it was ready to be shipped. Crickets... Hartzell says they have no idea.
If you read the court filing it says:
"However, on October 6, 2023 and October 12, 2023, notices were inadvertently sent to customers asking for final payment for kits that were not yet ready to be delivered. Mistakenly, a number of customers with orders that were not going to ship until 2024 were asked to pay their deposit. As a result of the inadvertent notice, Debtor commenced a policy that it would take all Customer Deposits received from and after October 6, 2023, and place them in a separate bank account to be held in trust for the benefit of those customers who remitted payment (the “Deposit Practice”) as opposed to the prior practice where the Customer Deposits were immediately made available and used for operations of the company. Pursuant to the new Deposit Practice, Customer Deposits received after implementation of the Deposit Practice are presently held in a separate account at Key Bank (“Customer Deposit Account”)."
If I understand the whole filing correctly (not a lawyer) Van's is petitioning the court to keep those funds separate. It's up to the court to decide on the matter one way or the other.
Oliver
N804RV
Well Known Member
I did not read the court filing. Thanks!
Sounds like by the time this gets ironed out, my -8 will be flying with the cheapest used prop I can find that will work.
To be screwed by Superior's Crankshaft AD that is outstanding on the engine I bought and pickled before the AD came out, and now the prop I paid for and will never see, I'm pretty bummed!
They are proposing and undertaking to keep deposit funds separate yes, but it's important to understand that it is only an undertaking on their part - it is not escrow.
In escrow, a third party holds the money and legal agreements govern access to it. The parties to the agreement literally cannot access the money until conditions are met.
This is just Van's undertaking to keep the money in a separate account. To access it improperly would violate their undertaking to the bankruptcy court, but it is still in their bank account and can be accessed by them. It remains essentially a matter of trust.
This applies more to kit deposits than engine deposits, but the terms also allow a large degree of latitude regarding when a deposit is released into general funds. The terms speak of a notice of commencement, and make reference to when kit production starts. Now, it would be easy (and truthful) to state that a kit with a lead time of e.g. 1 year actually starts production immediately the order is received, since a kit is not produced all together but put together from different production runs of parts, some of which may have been in inventory for a considerable period of time. Perhaps your kit contains some parts that were produced around the time you placed the order, or even before.
I called Vans Monday afternoon to put a deposit down for a Lycoming. By the grace of God, they had a message that they were closed for a company wide meeting. Yesterday morning, I was able to reach Chris Gayman at Lycoming. He seemed to be blind sided and heard the announcement when we did. He said that Vans was their number one customer. I asked if I could order an engine directly from Lycoming, and he said there wasn't a mechanism in place for that. He said the dust needs to settle and management needs to make some decisions, based largely upon what Vans does. He did say that if after that, we cannot order an experimental engine through Vans, then he believes that Lycoming would make a different way to order the experimental engines. Not sure if that would be through other distributors or direct. I do hope that Vans can get back on their feet.
