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Meeting of the creditors

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bmellis11

Well Known Member
Sponsor
Just a reminder to all who may be interested, there is the official meeting of the creditors scheduled for 10am Oregon time today (10 minutes from now). This meeting is where the creditors should be able to ask any questions they want of management.

Via Phone:
888-469-1335

Passcode:
2517519
 
Did Hamstreet just say they need 70% of kit builders to accept the new prices to make this work?
 
cactusman said:
Did Hamstreet just say they need 70% of kit builders to accept the new prices to make this work?
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He said that was the original estimate and didn't really respond to the trustee's question about whether that threshold is still their estimate. He does believe that they will be around that number. The lawyer said as of two weeks ago the acceptance rate of new order terms is 50%. They believe a lot of people were waiting for the LCP report to make a decision. I'm curious what the acceptance rate is today.
 
If this is a meeting of the creditors, why aren't we allowed to ask questions? I'm on the call but in listen only mode.
 
NavyS3BNFO said:
If this is a meeting of the creditors, why aren't we allowed to ask questions? I'm on the call but in listen only mode.
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They said they will open it up to people on the call after the lawyers are done questioning Van's. I figure this is going to go on for several more hours.
 
cactusman said:
442 Engine Deposit Holders affected. They just got back from a meeting with Lycoming. Sounds like terms coming next week.
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I got distracted and thought I heard them say they have a two year supply of engines, so if their engine supplier decides not to work with them going forward, they will have two years to find another one. They can't be talking about Lycoming... Were they talking about Rotax or did I just imagine or mishear that?
 
JwWright57 said:
I tried the call and its just music
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They were on break for 10-15 minutes and they had the music playing then. We are back on now.

They are letting the non-lawyers speak now. Currently a builder that showed up locally is speaking and then they will turn it to the callers.
 
bmellis11 said:
I got distracted and thought I heard them say they have a two year supply of engines, so if their engine supplier decides not to work with them going forward, they will have two years to find another one. They can't be talking about Lycoming... Were they talking about Rotax or did I just imagine or mishear that?
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I heard that too, but it didn't make sense to me either. They didn't specify Lycoming or Rotax.
 
Confirming rumors--they confirmed that an offer was made by a third party for the company and they did not find it "viable".
 
Just as a reminder to those calling in: The purpose of the creditor meeting generally is to ask questions about the company financials and the expectations for proposed plan to bankruptcy. It's not to give long explanations, recitation of chronology about LCP or the testing process, provide commentary about process and your specific circumstances or email problems, seek legal advice, or asking "the court" to do something in particular (when there is no judge on the call). It's your time to ask "where is the money" and investigate alternatives on how to get creditors paid and satisfied.

Based on what I've heard already, Van loaded up the company with secured debt when selling it the buildings. And the post-petition loans were approved to accrue 10% interest. From my perspective, if they really are "so pro-customer" (in the words of the company on the call), then the majority shareholder and largest creditor would insist on all unsecured creditors being paid first, all promised LCP parts being delivered, and all modified orders being delivered before he receives one dollar in repayment on principal and interest.
 
It's hard listening to speaker (builders) that are grinding an axe and not flowing the current technical reviews.
 
QuixoteAg said:
Thanks Ben.

I just joined a bit ago on the line - have they discussed timing of engine/prop decisions?
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They mentioned they have had meetings with Lycoming and expect to announce our options for engines by the end of next week. They didn't mentioned anything about props.
 
Interesting…it just occurred to me that if you DO sign the new contracts, than Vans emerges from bankruptcy and still can’t make it you can lose your money AGAIN if they declare again (Hope That doesn’t happen)
 
JwWright57 said:
Interesting…it just occurred to me that if you DO sign the new contracts, than Vans emerges from bankruptcy and still can’t make it you can lose your money AGAIN if they declare again (Hope That doesn’t happen)
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But it also sounds like if you agree to new terms, they emerge, and for some reason cannot perform you are then entitled to a full refund of your new contract terms. Seems as though there is more protection for the consumer if you accept the new terms since the court is involved. Unless I misunderstood that in the call.
 
bmellis11 said:
I got distracted and thought I heard them say they have a two year supply of engines, so if their engine supplier decides not to work with them going forward, they will have two years to find another one. They can't be talking about Lycoming... Were they talking about Rotax or did I just imagine or mishear that?
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They said they have two years of engines ON ORDER, not in stock.
 
Cholley6 said:
But it also sounds like if you agree to new terms, they emerge, and for some reason cannot perform you are then entitled to a full refund of your new contract terms. Seems as though there is more protection for the consumer if you accept the new terms since the court is involved. Unless I misunderstood that in the call.
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I thought that part of the call was very confusing. I think what they were saying is that money you put into the company post petition is held in escrow until crating notices go out. So if they file bankruptcy before they send you the crating notice, then your escrowed funds would be returned. However, if they go bankrupt after taking your money out of escrow and putting it into the company, but before shipping, then they would be back in bankruptcy and you would have a claim for the full amount, but in that case they wouldn't have money to return to you (because they would be bankrupt), and you'd be in the same position as all unsecured creditors are right now.
 
Cholley6 said:
But it also sounds like if you agree to new terms, they emerge, and for some reason cannot perform you are then entitled to a full refund of your new contract terms. Seems as though there is more protection for the consumer if you accept the new terms since the court is involved. Unless I misunderstood that in the call.
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Right but Vans has already shown that going into bankruptcy they have no hesitation in canceling existing contracts. So it could happen again.

i really feel for the people impacted, Vans reputation listening to this call is basically non existent now.
 
bmellis11 said:
They are held in a separate account and the court order says they are to be held in trust.
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That was my understanding. I'm surprised the term escrow is repeatedly used on the call with lawyers involved when it is a trust given the significant legal differences.
 
And it's done. 4hours 10 min. Bottom line Pay up or lose all, no guarantees on price increases. Lycoming and Rotex &props & avionics up date closer to the dead line February 12th
Did I miss anything?
 
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I'm overseas in the Philippines and received notice of the meeting only this morning at 04:30 local time due to time and date differences. I logged in in time to hear the final 10 minutes of the meeting, but when I tried to ask a question it was apparent I could not be heard. My question is, is there a law firm that can be used to handle filing an objection with the court? I simply can't do this myself from Asia.

I don't intend to continue with the construction of the aircraft, I have three competed kits paid for (post laser cutting) and delivered sitting in the US which perhaps I can sell, but intend not to take delivery of the remaining kits or the engine and propeller ordered thru Vans.
 
rhill said:
And it done. 4hours 10 min. Bottom line Pay up or lose all, no guarantees on price increases. Lycoming and Rotex &props & avionics up date closer to the dead line February 12th
Did I miss anything?
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I wouldn't say "lose all" but you'd be in unsecured creditor category, and you can also object to the company's rejection of your contract. Notices of rejection will be sent after January 30.

Also bottom line on LCP is that they're committed to providing replacement of the "recommended" category of parts, and will replace the entirety of an assembled QB kit (not just the parts themselves for the builder to swap out). But they will not take responsibility for any other parts, liabilities or other damages arising from LCP in the future, or committing to seek further FAA guidance/approval for the LCP that are not being replaced.
 
rhill said:
And it done. 4hours 10 min. Bottom line Pay up or lose all, no guarantees on price increases. Lycoming and Rotex &props & avionics up date closer to the dead line February 12th
Did I miss anything?
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You did. It's pay up or file a claim (could lose none, some, most or all.)
Engine, prop and avionics customers who don't accept new terms will get 30 days from that rejection notice to file a claim.
 
My big take away is that backordered items will be honored (with no upcharge.) Big news for those of us with big ticket items on backorder (seats, wheels, brakes, did I mention seats? :))
 
My take away from the call today: Vans team seemed to be very honest and concerned with customer experience about all topics…. Until the last question came up, asking about contract terms between Lycoming and Vans… There is no indication whatsoever that Lycoming is not honoring the engine price of existing contracts. And Vans team kept saying terms are confidential. I can’t help but thinking that Vans might leverage existing negotiated engine prices with Lycoming to “get more margin” from engine buyers.

I am hoping Vans is not doing this to their valued customers. It would be a low class opportunistic move.
 
mikebee said:
.......and will replace the entirety of an assembled QB kit (not just the parts themselves for the builder to swap out). .....
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Is that right? This seems like news! Lots of people grumbling about having to build/rebuild flaps and ailerons that they paid for completed parts. If Van's intends to replace completed parts with completed parts, there should be a whole lot of people that are suddenly a lot happier.
 
jimbom said:
That is the exact opposite of what I heard. Their latest news article did say they will look into offering (for additional $) assembled replacements for flaps and ailerons.
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I'd have to listen to the recording again when posted, but there was a guy asking questions in the last hour who said he had a QB kit and asked if he would get laser cut parts and have to replace himself and the time it would take to complete that work. I swear the response I heard was that they would replace an assembly with an assembly.
 
Perhaps I was a bit harsh, Vans like ourselfs lives in the real world, shipping cost, Legal costs, unreliable out sourced contractors. I doubt they will manufacture, ship a second QB kit to anyone without a substantial increase $$$$$. Doesn't matter where you are ,look around business are failing everyday, We still need to wait and see what will happen with the Lycoming & Rotex money. February 12th is the next line in the sand.
 
jimbom said:
That is the exact opposite of what I heard. Their latest news article did say they will look into offering (for additional $) assembled replacements for flaps and ailerons.
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My understanding from the call is that QB assemblies would NOT be replaced. Only that (red) parts would be provided free of charge to QB owners to replace in their QB assemblies as they see fit. Van’s is walking a very fine line between saying parts should be replaced, and providing those parts, but pushing liability for using them or not onto the builder.
 
As they were running out of time, the (edit) Trustee said they would provide an email address to send additional questions. Was I the only one that missed that (or was that possibly only communicated to those still in the phone queue?)
 
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Estevanb said:
Until the last question came up, asking about contract terms between Lycoming and Vans… There is no indication whatsoever that Lycoming is not honoring the engine price of existing contracts. And Vans team kept saying terms are confidential. I can’t help but thinking that Vans might leverage existing negotiated engine prices with Lycoming to “get more margin” from engine buyers.

I am hoping Vans is not doing this to their valued customers. It would be a low class opportunistic move.
Click to expand...

That was my perception too. I felt the answer was vague and evasive. Isn’t the agreement between Vans and Lycoming subject to review by the court if requested? This is essentially a third party item drop shipped to a customer. If there is no change in pricing why is there a price adjustment? Vans deserves some margin but I’m afraid they’re using it as an opportunity to subsidize other areas.
 
So I've done some reading and I've received a letter from the Liquidator, however being overseas I'm still a little confused about what to do.

The school trust I work with has a $6000 credit in their account with Vans. Or had. We do not have any outstanding orders but the credit in the account represents a significant sum we can put towards the future kits we need to buy for our next project (engine/avionics). The way I understand it, we need to file a claim in order to avoid the possibility of losing this credit - is this correct?

Any helpful advice would be appreciated.
 
Estevanb said:
My take away from the call today: Vans team seemed to be very honest and concerned with customer experience about all topics…. Until the last question came up, asking about contract terms between Lycoming and Vans… There is no indication whatsoever that Lycoming is not honoring the engine price of existing contracts. And Vans team kept saying terms are confidential. I can’t help but thinking that Vans might leverage existing negotiated engine prices with Lycoming to “get more margin” from engine buyers.

I am hoping Vans is not doing this to their valued customers. It would be a low class opportunistic move.
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Not only did I get that Van’s will get the price that was locked in when we put deposits down, but if you decide to not accept the change in price Van’s requires, they will buy the engine and sell it to someone else.

We will see how much Van’s is really trying to protect customers. They could jack Thunderbolt prices to current levels and make $25k per engine. That would be the last straw for me. That would be a really shitty thing to do in my opinion. Lets hope they are decent human beings.
 
I think they also said that if they did not hold their deal with Lycoming confidential that they would lose that deal. It might be less about letting customers know, than competitors know what their terms are. Could be dictated by Lycoming.
 
planenutz said:
So I've done some reading and I've received a letter from the Liquidator, however being overseas I'm still a little confused about what to do.

The school trust I work with has a $6000 credit in their account with Vans. Or had. We do not have any outstanding orders but the credit in the account represents a significant sum we can put towards the future kits we need to buy for our next project (engine/avionics). The way I understand it, we need to file a claim in order to avoid the possibility of losing this credit - is this correct?
.....
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First I am not a lawyer so don't take this as legal advice but my opinion. Yes, you should have the trust file a claim. As I understand your post, the trust has/had a credit balance on the books with Vans. There is not any outstanding orders or contracts. As such the credit balance should have been listed as a liability on Vans balance sheet. Through the bankruptcy process those liabilities, including the credit balance, are frozen and only will be paid, if paid at all, over time. So at this stage the credit balance has been made zero. Thus a claim as an unsecured creditor needs to be made so the trust can get in line for re-payment. Be sure and explain the situation on the claim form , scan and attach supporting documentation such as a statement or invoice from Vans showing the credit balance. Be sure to mark the priority box, as this may be considered a deposit on hold which means you can claim $3,350 as a priority claim. Just means priority claims are considered for payment before the remainder.

It is important to file a claim as you have no outstanding contract to renegotiate/accept/reject. So the only recourse to get the credit back is to file a claim.
File a claim here: https://onlineclaims.bmcgroup.com/VansAircraftInc/claim/filing410

JJR
 
NavyS3BNFO said:
That was my perception too. I felt the answer was vague and evasive. Isn’t the agreement between Vans and Lycoming subject to review by the court if requested? This is essentially a third party item drop shipped to a customer. If there is no change in pricing why is there a price adjustment? Vans deserves some margin but I’m afraid they’re using it as an opportunity to subsidize other areas.
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This is my first experience with bankruptcy, but I take it as everything is subsidizing everything. Van's can't pay all their creditors right now and that includes our 25% engine deposits. I'm guessing they'll bargain with Lycoming to finance the shortfall and ask to charge us more to pay for that financing.

Everybody is going to take a hit to get them back to profitability, I'm afraid (except for, perhaps, surviving employees and secured creditors.)
 
pjc said:
My understanding from the call is that QB assemblies would NOT be replaced. Only that (red) parts would be provided free of charge to QB owners to replace in their QB assemblies as they see fit. Van’s is walking a very fine line between saying parts should be replaced, and providing those parts, but pushing liability for using them or not onto the builder.
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This is what I heard too
 
Cholley6 said:
I think they also said that if they did not hold their deal with Lycoming confidential that they would lose that deal. It might be less about letting customers know, than competitors know what their terms are. Could be dictated by Lycoming.
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The bankruptcy trustee could make them disclose it if he wanted to. I believe creditors have a right to know. I was surprised they refused to disclose that since it is an issue that is important to many creditors.
 
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