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.