As A Matter Of Fact, Skystar Owes Rotax $24k... NOT Listed In BK Docs!

The questions continue to mount in the wake of Skystar's tragic Chapter 7 bankruptcy filing -- especially in regards to engine orders and the payments/deposits a growing number of customers claim to have made for them.

Complaints have been relayed to ANN over alleged orders placed for engines in which large deposits, some of them for the full value of the engine were made -- with delivery dates quoted weeks and months away. Mind you, Rotax states emphatically that it was not paid for any engines that remains unshipped, and as a matter of fact, Skystar (due to the length of the relationship the company had with them), was one of the few companies given limited credit terms for engine orders.

Generally; when Rotax receives an engine order, it's for cash on the barrel head and is shipped right away as Rotax inventories a pretty impressive number of engines in order to offer speedy service.

So... stories of long delays for engines sound sadly suspicious in light of the well-documented way that Rotax does business -- and casts an even more negative light on the business practices of Skystar as it worked its way to last week's bankruptcy filing.

Unfortunately; a perusal of the court record shows that there is no mention of any documented claim for Rotax... and Rotax claims that Skystar owes them the better part of $24K (about two engines) for deliveries made on credit. One wonders how many other creditors may have been omitted from what is already on a lengthy list (over 230 at last count) -- and why. Preliminary surveys and reports indicate that his situation may be even more chaotic than we've been led to believe so far.

According to Rotax's Eric Tucker, "... Your lead story on Kitfox is indeed a sad thing, we, Kodiak Research Ltd, are also holding the bag with debt from Skystar. Some customers may think that we got money in advance from Skystar, that is certainly not the case, in fact we gave them credit and still we had to hold back to wait for funds before sending additional engines. Skystar was an old and respected customer, in the past when they got into trouble they always worked it out, they would find a way to get back into the game. Given the change in the rules with the laws on bankruptcy it seems that the only option was for them to close the doors.

On the good side we have already been contacted by one of the former employees who wants to support the Kitfox family and make firewall forward assemblies available. Since we are only in discussion I can’t say anything, but I am sure that someone will take up the slack and look after the more than 3500 kits that have been sold over the years.

To the people who have lost money on deposits, this is indeed a sad day. As a suppler we have lost a long and valued customer, and even when we saw they were struggling we supported them with what we could, and have also lost. Our claim is indeed not secure; we have no hope of getting our money. Still, our heart goes out to the former employees of the company, who for the most part worked hard to look after the customers and make a good and reliable product for our industry. I am optimistic that whoever buys the tooling may get back into production a fine aircraft; the Kitfox family of owners deserves support and were very loyal to the aircraft."

ANN continues to look into the Skystar bankruptcy and will file additional reports shortly. In the interim, ANN has also been contacted by a number of potential suitors for the company, seeking market and background info in preparation for a possible bid to whomever winds up with the assets (most likely the primary secured creditor, Phil Reed) and if the legal proceedings don't drag out too long, there is a strong possibility (based on the interest we're seeing already) that customers won't be orphaned too long.

We'll keep you informed.

FMI: www.skystar.com, www.rotax-aircraft-engines.com/aircraft/aircraft.nsf/index?Openpage