Investor revolt could kill Eclipse

ALBUQUERQUE (KRQE) - Big investors who loaned money to Albuquerque jet maker Eclipse Aviation asked a federal judge Tuesday to force it into Chapter 7 bankruptcy.

If the judge agrees, the company would be finished.

The company already is in Chapter 11 bankruptcy which allows it to stay in business and hold off creditors while it reorganizes. Chapter 7 would let creditors seize Eclipse's assets and sell them off to get back at least part of what the company owes them.

"This is not a good sign for employees," Albuquerque bankruptcy attorney Bill Davis, who is not involved in the Eclipse case, told KRQE News 13.

He also said there are still chances to save Eclipse, but one is a long shot.

"Unless some white knight multibillionaire comes along," he said.

The other is a deal that has supposedly been in the works since the manufacturer of small passenger jets filed for Chapter 11 protection in November.

Reorganizing Eclipse was supposed to mean its court-approved sale to ETIRC, a European group that is Eclipses' largest shareholder.

But the creditors who filed the Chapter 7 motion Tuesday claimed the financing ETIRC needs to close the deal has fallen through.

Eclipse Chief Executive Officer Roel Pieper, who also runs ETIRC, was supposed to meet with representatives for creditors Monday, but he was a no-show.

Davis said he believes it's because Pieper doesn't have any good news to share with creditors.

"When the creditors lose faith they say, 'OK, if this thing's not going to reorganize, let's convert it to a 7 so I can have my collateral back,'" Davis said.

A bankruptcy judge in Delaware will hold a hearing on the Chapter 7 motion sometime in the next 30 days. If ETIRC somehow finds the financing before then, the deal could still go through.

"If that sale doesn't close then Eclipse will not operate again," Davis said.

Meanwhile the final 800 Eclipse workers placed on unpaid furloughs last week remain in limbo.

"Their best hope is that the deal that was approved by the bankruptcy judge closes because that's the only way, in my opinion, that Eclipse is going to continue to operate," Davis said.

Eclipse was not commenting Tuesday night but promised a statement Wednesday.