Van's Files for Reorganization Under Chapter 11

[spatsch]

I simply prefer I was sent what I purchased…. as I’m sure everyone else.



That 1/5th the flying fleet is a viewpoint I hadn’t seen considered. That’s very damaging to public perception. Unfortunately I think their public perception is just too good to go sour. I say this in the sense that I still find rv owners who have no clue they’re in financial problems or bankruptcy, or continue to tell me my issues are just my “perception’. It will take some years before that generation is gone and the “bankruptcy” generation becomes the new majority. Conversely, if it does go sour… The bankruptcy generation may be a group of older builders that don’t exist 15/20 years from now. But seeing as Covid brought on a lot of what looked to be a younger crowd to the market, hard to tell. Some added debt to save face now might go a heck of a long way in the future. But I’m not sure they are considering that. Sometimes when you have a good perception you leverage that to help yourself out which I think Hamstreet sees and is planning on using. If canceling contracts is not Dick’s goal for customer satisfaction, he’s going to have a hard time differing with the hamstreet advisors that he’s paying several 100k for their opinion. If I hire someone’s opinion, I’m pretty inclined to want to listen to it.

I am not sure customers satisfaction is a good argument. Look at the attached table from the filing. When Van's sold 1594 kits the following year they made 3 million (I look at the following year as it takes at least that long from order to delivery) and when you look at the trend the more they sold the less money they made the next year since 2019.

So having fewer customer the company in its current state can handle well. Having a lot of customers they can not. At least not based on the data from the filing.

So as they still need customers fewer more fanatic once are better for them which is exactly what they will get.

Oliver

 

[Paul 5r4]

I am an avid Vans Aircraft supporter however... My head isn't buried in the sand either. If I were ready to plop down many $$$ for a kit/engine, honestly I just wouldn't. And, as of now, I don't feel anyone would. Even when the company emerges from this mess, the reputation and that's all a company really has, IMO is tarnished. It will take again IMO, 3 or more years of consistent deliveries and kept promises before the stink of this will pass. Who will be the first to lay out the kind of $$$ required to purchase kits? Some one with big bazookas!

Unless the money, like buying a house, could be held by a third party and confirmed available by Vans staff at time of pick up or shipping. I don't know.
This is all so sad.

 

[mstrauss]

Where did the money go?

I'm sorry... I just don't understand how Vans got here (insolvent). If I'm being asked to pay more for my current contracts to be honored, I'd like to know where the money went. It's not like they have replaced a single LCP, so it didn't go to making them. They haven't fixed one QB with LCP, so it didn't go there. Just how much was spent on testing LCP? Is that where all the engine deposits went?

Honestly, I don't understand how the former management team (Greg, et al) still works at the company. In the real world, the leaders at the helm of a company brought to bankruptcy, are unceremoniously showed the door.

Exactly what pain is being paid by the organization (equity holders)? It's very clear the kind of pain the customers are being asked to pay (assuming the current plan is approved).

 

[sc_pilot]

I am not sure customers satisfaction is a good argument. Look at the attached table from the filing. When Van's sold 1594 kits the following year they made 3 million (I look at the following year as it takes at least that long from order to delivery) and when you look at the trend the more they sold the less money they made the next year since 2019.

So having fewer customer the company in its current state can handle well. Having a lot of customers they can not. At least not based on the data from the filing.

So as they still need customers fewer more fanatic once are better for them which is exactly what they will get.

Oliver

Makes sense. Ironic that bankruptcy is the process that will help them in that regard.

 

[Kyle Boatright]

I'm sorry... I just don't understand how Vans got here (insolvent). If I'm being asked to pay more for my current contracts to be honored, I'd like to know where the money went.

Wave 1 was defective primer on quickbuilds. $$ down the drain. Maybe millions.

Wave 2 was buying equipment to increase production. Millions again. Not lost (they have the equipment), but the cash is gone.

Wave 3 was selling kits in 2022 at 2020 prices, which means they were selling wing kits that cost $10K for...$10K. So they made no headway in paying for Wave 1 or 2.

Wave 4 was creating a bunch of LCP issues (1800 customers worth) that they have to remediate in some way. The bankruptcy filings (IIRC) value this at $5M.

So they dug a hole, continued digging, dug some more, then wondered how they ended up in the bottom of such a deep pit.

 

[lyosha]

Maybe. But at the moment I’ve paid them: $45,907.53. Not including roughly 4k in Rv12 finish kit backorders. So more like 50k but whatever. If my paid for dynon avionics that’s at steins shop currently gets reinvoiced, and my 39k balance payment on my rotax engine also raised at say the 30% people are guessing to cover lost deposits. Thats 25k I need to cough up. Some might say that I’m in a better position. But at 26 working an average blue collar job… spent life savings on a dream… I’d say I’m in no good position. No one’s in a good position. This means I have to come up with 25k in the time they’ll request payment to avoid taking a $46k loss in the bankruptcy creditor line. Hard pill to swallow at a young age that was caused through no fault of ours. I’m reasonable and would be willing to negotiate on a new contract… but there has to be a negotiation not an all or nothing situation.

Thats why when people like Paul write that just cause we’re purchasing aircraft we are better off financially than the employees at vans… I’d say not all of us are building on a retired nasa career budget. Some of us are working the same jobs as the punch press operators. Thats why I don’t have patience for opinions from those with no monetary stake in the game or wouldn’t be financially ruined if they lost $45,907.53 or more than their annual salary.

Remember this wasn’t an investment with risk or assumed possible lost. I purchased an item just like you would at the grocery store. If I wanted to invest… I would not be throwing Rv12 sums of money on any sort of risk at my age. I’m preaching to the choir on all this, we know where we each stand but thanks for coming to my ted talk

Basic game theory dictates the worst thing you can do is try to negotiate alone, and the best is collective bargaining.

That is without factoring costs to bargain - factoring in that negotiation costs salaries for Vans that would surely be priced into the outcome for builders.

 

[Kyle Boatright]

Let’s not forget a boatload of money spent developing the new shiny toy.

They’ve been borrowing money for over two years now. Did no one in the C-suite know how to analyze a P&L statement? And yes, I’m also including the founder in that question (since he was the one loaning the company the money).

To be honest, cashflow and profit/loss are related but different. You *can* be very profitable but run out of cash. You can have a lot of cash, but be unprofitable. Maybe they were watching one, not the other? Or maybe the inventory issue (touched on below) was the final straw.

Another wave I'll add to my initial ones and the -15 is the inventory situation. Sounds like they have stacks of expensive inventory (presumably canopies, weldments, gear, wheels, etc), but not enough of the ancillary items to fully kit out and ship complete kits. So they are sitting on lots of inventory, which ties up a lot of cash. The good thing is as soon as they catch up on producing ancillary items (presumably punched, folded, and shaped aluminum parts) they will be able to ship full kits and turn that inventory into cash. Of course, builders will have to play along by paying the higher prices...

 

[Cholley6]

I think Kyle has it right here. At some point they realized that if they shipped all the kits they had deposits on at the 2020 price with 2023 cost they would make their situation worse. I would assume they are out of cash because they have thousands of outstanding orders that have mostly been produced and not shipped, and if shipped they would go backwards. I would expect all the deposits went to fabricate the parts in those orders, many of which had been fabricated at least twice if not 3 times due to the primer issues and then the LCP issues. I don't think they have run away from the issues they have, but simply run out of the cash to finish what they have been trying to do, deliver those kits. Has anyone tried to figure out how much they stand to receive once final payment is requested on the several thousand unfulfilled orders? Now the only option left is to change what they are charging to make shipping all those kits not a loss on each one. Only way to legally do that is Chapter 11. It still appears to me the only reason for going the Chapter 11 route is to change the price on what they have deposits on and haven't been able to deliver, everything else is just to appease the court to allow them to do that.

 

[airguy]

Basic game theory dictates the worst thing you can do is try to negotiate alone, and the best is collective bargaining.

That is without factoring costs to bargain - factoring in that negotiation costs salaries for Vans that would surely be priced into the outcome for builders.

Are you suggesting that we as builders should "unionize" and try to bargain with Vans on this? I don't think you're going to find much success there, considering that the Ch 11 process has already begun. Good luck...

 

[pjc]

Basic game theory dictates the worst thing you can do is try to negotiate alone, and the best is collective bargaining.

That is without factoring costs to bargain - factoring in that negotiation costs salaries for Vans that would surely be priced into the outcome for builders.

In ordinary Chapter 11 cases this (negotiating collectively) is the role of the creditors committee. In this case, Vans has filed as a small business under Subchapter V. This means a creditors committee may not be formed. Presumably this will be up to the judge.

Given the large number of relatively small, similarly positioned creditors (who know themselves as customers) and lack of dominantly positioned creditors (often lenders or bond holders) if *I* were the judge I would be of the opinion that a creditors committee of these customers, to negotiate on behalf of this class, would be very appropriate. Otherwise the DIP (Van’s) could simply dictate terms for honoring pre-petition executory contracts (the price increases they seek) in their reorganization plan.

That said, I have no specific expertise.

Some basics here https://www.uscourts.gov/services-f...der to file a,from the commercial or business

 

[jimbom]

The list in the petition of all of our names doesn't seem to have everyone. A few of us who are waiting on backorder parts from "delivered" kits and have engine deposits from over a year ago aren't there. Guess we're in no mans land for now.

An engine/prop list appears to be pending.

But your point about backordered parts from delivered kits is poignant. My backordered seats are worth as much or more than the empennage kit's totality. People simply out the deposit on the first kit are on the list of unsecured claims; We definitely need to be as well.

 

[czechsix]

Wondering how LCP expense will get distributed

I'm wondering how Van's will fund the replacement parts for LCP. The Chapter 11 announcement on their website clearly states that kit prices will go up including for those who already made deposits. They also talk about sending out replacements for LCP parts over the next year, but are silent on whether there will be any charge for the replacement parts or associated shipping.

The huge cost associated with LCP replacements has to come from somewhere and it's not like Van's can take it out of the CEO & CFO's year-end bonus or cover it by reducing dividends to the shareholders over the next few quarters. Unless Dick himself decides to donate $millions to fund this, the only other way I can think of is to charge customers for it (even if they take out a loan, that just spreads out the cost over a longer period of time...repayment of that loan with interest would still be on the backs of the customers in the long run). So that begs the question, do they fabricate and ship LCP replacement parts at no charge to those who need them? If so, the cost burden will fall completely on those of us who have undelivered orders and any future orders (all going up by 32% or whatever it turns out to be). That would be a great result for everyone who has suffered the delays, frustrations, and stress associated with the LCP issue, and it would be especially great for those who have all their kits and just need the replacement parts...if they get those for free, they'll end up in pretty good shape financially. But that approach would not be so great for customers like me who still need one or more kits to finish and would be bearing the LCP replacement cost on behalf of others. I don't doubt my finish kit price needs to go up to cover the increased cost of canopy, landing gear, engine mount, fiberglass, labor, shipping, etc...I just hope that the LCP burden isn't placed solely on the backs of current undelivered and future kit orders.

Will be interesting to see how Van's (and ultimately the court) decides to divvy up the pain but it's frustrating that most (all?) of the financial burden is ultimately on the customers who had no say in the decisions that led to this mess...

 

[Mistfarer]

Would you have preferred chapter 7? Then everyone loses everything as vans would be no more.

Chapter 11 is arguably better as they intend to stay in business.

Chapter 11 is never a good thing, you know. It might not be as bad as Chapter 7, but it does not make it good. No, I would have preferred Van's had been managed properly. Like it or not, I get that sh*t happens and many events were out of Van's control, but the whole situation could absolutely have been avoided if the leadership team had been running a tighter ship.

 

[lyosha]

Are you suggesting that we as builders should "unionize" and try to bargain with Vans on this? I don't think you're going to find much success there, considering that the Ch 11 process has already begun. Good luck...

It was a higher level statement. Vans cannot hear each individual story, and as much as possible it's optimal for builders to pool their risk together.

As someone mentioned the way this could be accomplished is via builder committees in court.

Obviously optimal for Vans that these not form for obvious reasons.

The sooner we realize that beyond corporate survival our interests are not immediately aligned with Vans at the moment the better our outcome.

 

[dstates]

I'm wondering how Van's will fund the replacement parts for LCP. The Chapter 11 announcement on their website clearly states that kit prices will go up including for those who already made deposits. They also talk about sending out replacements for LCP parts over the next year, but are silent on whether there will be any charge for the replacement parts or associated shipping.

The huge cost associated with LCP replacements has to come from somewhere and it's not like Van's can take it out of the CEO & CFO's year-end bonus or cover it by reducing dividends to the shareholders over the next few quarters. Unless Dick himself decides to donate $millions to fund this, the only other way I can think of is to charge customers for it (even if they take out a loan, that just spreads out the cost over a longer period of time...repayment of that loan with interest would still be on the backs of the customers in the long run). So that begs the question, do they fabricate and ship LCP replacement parts at no charge to those who need them? If so, the cost burden will fall completely on those of us who have undelivered orders and any future orders (all going up by 32% or whatever it turns out to be). That would be a great result for everyone who has suffered the delays, frustrations, and stress associated with the LCP issue, and it would be especially great for those who have all their kits and just need the replacement parts...if they get those for free, they'll end up in pretty good shape financially. But that approach would not be so great for customers like me who still need one or more kits to finish and would be bearing the LCP replacement cost on behalf of others. I don't doubt my finish kit price needs to go up to cover the increased cost of canopy, landing gear, engine mount, fiberglass, labor, shipping, etc...I just hope that the LCP burden isn't placed solely on the backs of current undelivered and future kit orders.

Will be interesting to see how Van's (and ultimately the court) decides to divvy up the pain but it's frustrating that most (all?) of the financial burden is ultimately on the customers who had no say in the decisions that led to this mess...

Odds are pretty good that the 1800 affected LCP customers are not all dealing with LCP in a finish kit. I would bet that half or more are likely tail kits due to that is what Van's sells the most of. These customers will still be paying the higher price on their future kits even if they do get some LCP's replaced at minimal costs.

 

[APicard]

we might get some more info later today or tomorrow from van's. looks like there scheduled today for a large list of video hearings.

 

[lr172]

To be honest, cashflow and profit/loss are related but different. You *can* be very profitable but run out of cash. You can have a lot of cash, but be unprofitable. Maybe they were watching one, not the other? Or maybe the inventory issue (touched on below) was the final straw.

Another wave I'll add to my initial ones and the -15 is the inventory situation. Sounds like they have stacks of expensive inventory (presumably canopies, weldments, gear, wheels, etc), but not enough of the ancillary items to fully kit out and ship complete kits. So they are sitting on lots of inventory, which ties up a lot of cash. The good thing is as soon as they catch up on producing ancillary items (presumably punched, folded, and shaped aluminum parts) they will be able to ship full kits and turn that inventory into cash. Of course, builders will have to play along by paying the higher prices...

looks like net income (no idea how close this is to real net, as no standardized reporting for private co's) was on the order of $2M before the last 2 years. Then a $2M and a $1M loss. On top of that, MANY $M's borrowed and spent on presses, QB primer mess, LCP analysis, etc. On top of all of that, all of the QB kits shipped and those ready to be shipped were priced below cost, so completing the transactions just digs the hole deeper. It would seem very clear to me that they have BOTH a cash problem AND a profitability problem, not to mention a management problem. Based on what was learned recently, most of the cash went to Van and was not sitting in the company accounts, though given his approach here, it works out to be the same. It seems he has pumped about $12M back in this year alone; Not sure we know how much was loaned back last year. Given that Van called uncle and said no more cash, we can deduce there is a cash problem.

We can assume they use P&L and balance sheets and cash flow measurement, but the reality is that this is a small private company and for all we know, it is run out of a check book that gets sent to the tax guy once a year. There is no auditing or other regulatory pressure to produce these kinds of reports like there are for public companies, so it is up to the CFO to create them and use them. It seems apparent they didn't use these tools as best practices require putting deposits into the liability category (prepaid debt), not an asset and had a balance sheet been produced it would have been blood red. Some of the mistakes made would be covered in sophmore level business classes. You don't need a harvard MBA to realize that products cannot be sold at a loss for any period of time. If you make $2M income per year, you simply cannot spend $10M in a year to address growth and problem rectification, at least not without a well thought out plan on borrowing and repayment as well as income generating strategies to pay it back. I continue to remain shocked that the C level execs, specifically the CFO and COO are still in place and drawing a paycheck. With the past mistakes in clear view, I just don't see how they can be trusted to get Vans back to health and on solid ground.

My intent here is not to speak ill of Vans, as I am a great supporter. However, I am a realist and state all this not to throw stones, but more about what is needed to right the ship.

 

[Vansconvert]

Was there anyone keeps tabs on vendor quality once the suppliers were approved? I think not.

 

[calvid]

I continue to remain shocked that the C level execs, specifically the CFO and COO are still in place and drawing a paycheck.

Are they? At least one of the court documents was signed by "Donald L. Eisele, Interim CFO". So it sounds like a change has been made there at least.

 

[bkervaski]

Are they? At least one of the court documents was signed by "Donald L. Eisele, Interim CFO". So it sounds like a change has been made there at least.

Donald Eisele is an RV-14 builder! https://www.vansaircraft.com/first-flights/don-eiseles-rv-14

 

[bmellis11]

Are they? At least one of the court documents was signed by "Donald L. Eisele, Interim CFO". So it sounds like a change has been made there at least.

They also have an interim CEO, I believe it's the guy from Glasair.

 

[lr172]

Donald Eisele is an RV-14 builder! https://www.vansaircraft.com/first-flights/don-eiseles-rv-14

We RV folks come from all walks of life, so it would be no surprise to find a highly competent financial guy among our ranks.

 

[ybarra15]

What about those with fully paid kits?

Sorry if I missed it, but what about those of us who have fully paid for kits and the kits have been sitting in their warehouse for months?

By definition, I do not have a deposit pending. I am simply waiting to take delivery of my order.

I noted in the bankruptcy filing that Van's is seeking to cancel/amend "certain" orders. I wonder what that really means. If they demand additional money after I've paid in full, that will be more than disappointing.

 

[bertschb]

Sorry if I missed it, but what about those of us who have fully paid for kits and the kits have been sitting in their warehouse for months?

By definition, I do not have a deposit pending. I am simply waiting to take delivery of my order.

No details on how this will be dealt with. I'm in the same boat and I'm expecting to pay an additional "final payment".

 

[dmattmul]

Previous CFO

Donald Eisele is an RV-14 builder! https://www.vansaircraft.com/first-flights/don-eiseles-rv-14

The previous CFO was also a builder and a very good one. (Builder) Great guy. He was the CEO before Ryan.

 

[GregInIdaho]

Change of heart

I seem to recall over the last few weeks many, many posts from people wanting to set up a go fund me page and willing to send money to Van's and make donations, etc. Anything to help out the company in trouble.

Now that Van's has filed for reorganization and said that they need to raise prices, everybody seems to have changed their tune.

The fact is that Van's got into trouble at the beginning of Covid. It was obvious from a layperson's point of view that the problems they were having could not be dealt with the way they were. We bought kits anyways.

I bought both an RV-10 and then a -12. For me, Van's business practices have been a clown show since the beginning. I ordered an RV-10 6/2021. Published lead time was 16 weeks for the empennage. Full payment was demanded for the wings and fuselage 2/2022 which I received 5/2022 (three month window - a hint of what was to come). A month later I received the empennage. That was 52 weeks to receive an empennage published at 16 weeks when I placed the order.

The fact is that Van's cannot borrow their way out of the mess they are in.

Van's must either liquidate or renegotiate their debts and prices. This may not seem 'fair' or 'right' but it is a fact. Van's CANNOT honor it's debts and contracts as it stands.

I do not believe that people who paid in full are going to lose their money. I don't believe (based on the spreadsheet) that people with deposits on engines are going to lose their money.

Each of us will experience some pain, but we have to decide if we want to be experiencing the airplane building experience or not. If not, pack up the kits you have and sell them for (+/-30%) below Van's asking price with immediate delivery. Someone will get a great deal, and you will be made whole(ish).

I have lots of parts to assemble, so I better get back to work!

 

[Jonnyb]

I seem to recall over the last few weeks many, many posts from people wanting to set up a go fund me page and willing to send money to Van's and make donations, etc. Anything to help out the company in trouble.

Now that Van's has filed for reorganization and said that they need to raise prices, everybody seems to have changed their tune.

The fact is that Van's got into trouble at the beginning of Covid. It was obvious from a layperson's point of view that the problems they were having could not be dealt with the way they were. We bought kits anyways.

I bought both an RV-10 and then a -12. For me, Van's business practices have been a clown show since the beginning. I ordered an RV-10 6/2021. Published lead time was 16 weeks for the empennage. Full payment was demanded for the wings and fuselage 2/2022 which I received 5/2022 (three month window - a hint of what was to come). A month later I received the empennage. That was 52 weeks to receive an empennage published at 16 weeks when I placed the order.

The fact is that Van's cannot borrow their way out of the mess they are in.

Van's must either liquidate or renegotiate their debts and prices. This may not seem 'fair' or 'right' but it is a fact. Van's CANNOT honor it's debts and contracts as it stands.

I do not believe that people who paid in full are going to lose their money. I don't believe (based on the spreadsheet) that people with deposits on engines are going to lose their money.

Each of us will experience some pain, but we have to decide if we want to be experiencing the airplane building experience or not. If not, pack up the kits you have and sell them for (+/-30%) below Van's asking price with immediate delivery. Someone will get a great deal, and you will be made whole(ish).

I have lots of parts to assemble, so I better get back to work!

Totally agree.

I have to say I find some of the comments from people quite disheartening. It seems there’s a small minority of this “community” who wish to send Vans to the wall.

And yes, I do have a horse in this race.

 

[Latech15]

Page 2 post 12 from bmellis11 has all of the documents. The list of names document is the bottom left document and page 18 of 45 starts the list of names.
If you’re builder number 83585 you’re on page 41/45.

Regards,
Zach

Is this list gone? I don't see any list, nor do I even see a document that has 45 pages.

 

[calvid]

Is this list gone? I don't see any list, nor do I even see a document that has 45 pages.

Yeah, looks like they redacted it. If you DM me your email address, I'll send you the original.

 

[airguy]

Is it possible that there are some in the community that simply want fair treatment in this restructuring - versus what appears to be a deal heavily weighted in favor of a single individual? Looking from a distance, it appears the people in line to take a haircut are the multitude of customers and some number of Van’s employees. The owner is clearly taking a big risk, as there are no guarantees this endeavor will be successful. They’ve lost a lot of trust as evidenced by comments here that will be difficult to rebuild. Assuming this is successful, though, the majority owner will potentially have complete ownership along with a nice interest bonus.

I don’t think there is anyone here that wants to see Van’s fail.

No such thing as "fair treatment" in a bankruptcy. That's just the nature of the beast.

Assuming this is successful, though, the majority owner will potentially have complete ownership along with a nice interest bonus.

As is his right - for taking the risk. Remember that he used to have complete ownership of the company - before he sold some percentage of it to the employees.

You yourself are certainly free to make an offer to the court to be DIP in place of Van, if you can offer competitive terms.

 

[flyrlfs]

Is it possible that there are some in the community that simply want fair treatment in this restructuring - versus what appears to be a deal heavily weighted in favor of a single individual? Looking from a distance, it appears the people in line to take a haircut are the multitude of customers and some number of Van’s employees. The owner is clearly taking a big risk, as there are no guarantees this endeavor will be successful. They’ve lost a lot of trust as evidenced by comments here that will be difficult to rebuild. Assuming this is successful, though, the majority owner will potentially have complete ownership along with a nice interest bonus.

I don’t think there is anyone here that wants to see Van’s fail.

Mr. Vangrunsven is the Debtor In Posession (DIP) in the court filing. As such, he's first in line to recover is loan, behind the IRS. The risk is still there but minimized.

The deal is heavily weighted in Vans favor. They ask for contract cancellation while keeping deposits. And they will offer new contracts at prices/deposits to be determined by them later. I suspect they already know what they are going to demand in pricing but don't want to tip that card yet.

 

[Jonnyb]

It just seems to be a very unusual situation where the majority owner is also the source of the DIP financing and potentially ends up in a much better position exiting bankruptcy.

Do we know he’s the majority owner? I thought he set up an employee ownership agreement in 2003.
Does it say he’s the majority owner in the court filings?

 

[Strikhedonia]

Have none of you read the documents or the history of Van's Aircraft??? Van SOLD the business to the employees 20 years ago. He IS NOT the owner, the employees are the owner's of Van's Aircraft.

Van offered the company loans at a 9% interest rate, the bankruptcy filling shows that the market rate is 13-15% with various fees for loan origination. Van is giving the company one **** of a deal. And should be thanked for saving the business and bringing in new experienced management to right the ship.

I get you are pissed, disappointed, disillusioned and upset that you will pay more for your airplane. Rightly so, but step back and realized this could be much, much worse. The airframe cost will likely increase 32% but if the company liquidated you would all be getting pennies on the dollar. That is how bankruptcy works. That is a United States policy NOT a Van's policy. Complain to your governments officials if you don't like how bankruptcy works.

 

[jrs14855]

Owner

Van pumped a VERY large amount of money into the company to try and save it.

 

[Overshoot]

He cashed out of his company, a common practice, and to save his remarkable legacy, is loaning back some of the proceeds to the company at modest interest rates. That’s a good thing.

The employees will see their purchased investment go to zero, with a chance to make some of it back if Vans emerges from Chapter 11 as a viable company.

Van was smart to cash out to secure his retirement, and is smart to do what he is doing now.

Most important is Vans coming up with a business plan that works upon exit and will generate free cash flow in a consistent manner. Everything else is rubbish.

 

[Ironflight]

Have none of you read the documents or the history of Van's Aircraft??? Van SOLD the business to the employees 20 years ago. He IS NOT the owner, the employees are the owner's of Van's Aircraft.

Van offered the company loans at a 9% interest rate, the bankruptcy filling shows that the market rate is 13-15% with various fees for loan origination. Van is giving the company one **** of a deal. And should be thanked for saving the business and bringing in new experienced management to right the ship.

I get you are pissed, disappointed, disillusioned and upset that you will pay more for your airplane. Rightly so, but step back and realized this could be much, much worse. The airframe cost will likely increase 32% but if the company liquidated you would all be getting pennies on the dollar. That is how bankruptcy works. That is a United States policy NOT a Van's policy. Complain to your governments officials if you don't like how bankruptcy works.

Well said Chris - someone who finally gets it! Dick VanG is a friend, yes - and one of the most principled and honest men I know. He has done more for experimental aviation than anyone in history, and is the reason that thousands of folks have had the opportunity to participate in this great endeavor that we call homebuilding. He has stepped back in (out of retirement) to do what he can to help right the ship.

I’m no financial genius, but I understand large numbers of dollars - and without the money he has pumped into the company in the past few months, it would be in liquidation, not reorganization. That deserves thanks - not frequent hints of blame.

 

[bmellis11]

Well said Chris - someone who finally gets it! Dick VanG is a friend, yes - and one of the most principled and honest men I know. He has done more for experimental aviation than anyone in history, and is the reason that thousands of folks have had the opportunity to participate in this great endeavor that we call homebuilding. He has stepped back in (out of retirement) to do what he can to help right the ship.

I’m no financial genius, but I understand large numbers of dollars - and without the money he has pumped into the company in the past few months, it would be in liquidation, not reorganization. That deserves thanks - not frequent hints of blame.

I second this and Chris' post. Van could just walk away from all of this and enjoy the rest of his life in peace and prosperity. Instead he liquidated assets (likely with tax consequences) to save a company that he had no legal obligation to save. He's not getting some unfair advantage--he's saving the company and doing the best he can for the customers given the circumstances. My (Van's) hat is off to him, and I have significant amounts of money tied up in this.

 

[AeroEngineer]

Have none of you read the documents or the history of Van's Aircraft??? Van SOLD the business to the employees 20 years ago. He IS NOT the owner, the employees are the owner's of Van's Aircraft.

Actually...

Ive been told by an insider Van retains 60% of the company.

I too have heard something similar from an insider.

Like other folks here, I really appreciate what Van is doing, probably saving the company.

 

[RV8JD]

Have none of you read the documents or the history of Van's Aircraft??? Van SOLD the business to the employees 20 years ago. He IS NOT the owner, the employees are the owner's of Van's Aircraft.

Not quite. Apparently, he sold a portion to the employees. From the 'Corporate Ownership Statement':

And yes, I read the documents! (Well, most of them anyway! )

 

[Swingwing]

I commend Van's for their transparency as this difficult situation unfolds.

As a member of the Rotorway community, I can share firsthand that RotorX has decided to handle its bankruptcy entirely differently. After years of unfilled promises, many customers are out large sums of money, and there has been little communication from the owner. Their only recourse will be to stand in line as unsecured creditors.

 

[RV8JD]

Van pumped a VERY large amount of money into the company to try and save it.

Yes he has, most of it secured. The info below is taken from the BK documents. Note that the last $6M is pending court approval. Van is offering that loan at an interest rate of 9.75% per annum.

 

[bmellis11]

Actually...



I too have heard something similar from an insider.

Like other folks here, I really appreciate what Van is doing, probably saving the company.

Van's attorney just said in court that Van is the majority shareholder.

 

[Strikhedonia]

I stand corrected, thank you.

Van could still have lived an easy life on the $16.65mm he has risked in loaning the money to Van's Aircraft. I am still beyond thankful that he has stepped up to get Van's aircraft back on solid footing rather than taking the easy route and selling out to the Chinese.

Van's attorney just said in court that Van is the majority shareholder.

 

[Latech15]

They just said in court that they expect 70% of the customers who have deposits in will accept the higher prices and reorder at the higher costs. I would have expected higher. What other option do we have?

 

[djohns]

IF I only had a tail kit on order not sure what I would do. Maybe wait and see how things play out and just accept a few thousand dollar lose.

 

[RV7A Flyer]

They just said in court that they expect 70% of the customers who have deposits in will accept the higher prices and reorder at the higher costs. I would have expected higher. What other option do we have?

I don't think there's any way to even approximate this. To begin with, *how much higher* price? 30%? 50%? 200%? Nobody knows.

 

[N804RV]

I missed the first 15 minutes. Have they already presented the motion to sequester funds from paid and not yet shipped orders from Hartzell and Lycoming?

 

[bertschb]

...Dick VanG is a friend, yes - and one of the most principled and honest men I know. He has done more for experimental aviation than anyone in history, and is the reason that thousands of folks have had the opportunity to participate in this great endeavor that we call homebuilding. He has stepped back in (out of retirement) to do what he can to help right the ship.

I’m no financial genius, but I understand large numbers of dollars - and without the money he has pumped into the company in the past few months, it would be in liquidation, not reorganization. That deserves thanks - not frequent hints of blame.

Thank you for sharing this Paul. I'm new to the homebuilding world and I've never met Dick VanGrunsven but it doesn't take a genius to see he and his wife have gone to extreme lengths to make sure the company he founded survives and flourishes long after he is gone.

I retired so I could live a life with less stress. I suspect Dick did the same thing. I can't imagine how much stress Dick and his wife are under right now and he's enduring all of this to save the company. ALL of us benefit from this huge sacrifice on their part.

I have tremendous respect for this man for doing everything he can to give thousands of people like me the chance to do something interesting with our spare time. In some cases fulfilling life-long dreams.

 

[Brantel]

Actually...



I too have heard something similar from an insider.

Like other folks here, I really appreciate what Van is doing, probably saving the company.

This was confirmed at the hearing. Van is the majority shareholder.

 

[2theskyy]

This is Mr.Vans world and he loves it very much. He was the company back in the day and sounds like he still is.

It may not help the current situation for certain folks involved. But it does add an asterisk for those directly involved.

He definitely cares!!