Sources: Last-Minute Funding Deal Comes Through

ANN REALTIME UPDATE 11.14.08 1415 MST: Workers at Eclipse Aviation will soon receive the paychecks that 24 hours ago they feared would not materialize... though it's still not clear how much longer they will be able to count on that.

Based on available information -- precious little of which has come from Eclipse itself, as the company still refuses to comment publicly on recent developments -- Eclipse was able to secure a short-term loan to cover payroll for the previous pay period, which ended November 8.

A recorded message at the 800 number given to Eclipse employees Thursday states that money will be in their checking accounts by Tuesday, November 18. Where that money is coming from is still not known... though it appears this funding was not the reported $200-$300 million Eclipse states it needs to continue operations.

On Friday morning, before news of the funding became known, Albuquerque Mayor Martin Chavez said he had spoken with Peg Billson, VP of Manufacturing at Eclipse, who told him she was confident the issue involving employee pay would be resolved shortly.

"They're looking at much more than paying the employees. They're looking at the survival of the company," Chavez told KRQE-13 Friday morning. "This round of financing, which they believe to be-if I recall correctly-$200 million to $300 million, which they think is forthcoming."

Chavez also revealed Eclipse owes the city some $200,000 in back rent for its facilities at the Albuquerque International Sunport.

Also on Friday, three more Eclipse customers filed lawsuits against the company, accusing Eclipse of not refunding deposits on their aircraft owed to them under purchase contracts signed prior to the May price increase that raised the purchase price of an Eclipse 500 to $2.15 million. As ANN reported, purchasers still waiting for their aircraft and who had not yet made their majority payments were allowed under contract to ask for refunds.

To date, at least seven buyers have sued Eclipse, stating they're still waiting for those refunds that were promised to them.

Previous Reports

11.14.08 1250 MST: Aero-News has learned Eclipse Aviation has apparently pulled its umpteenth rabbit out of a hat... and has obtained last minute funding that, at the very least, will cover payroll for Eclipse workers in New Mexico, New York, and Florida.

Independent reports to ANN have been collaborated by local media. At this time, few details are available... including the source of the funding, and the amount.

Needless to say, ANN will provide more details as they become available.

11.13.08 1545 MST: Workers at Eclipse Aviation -- already told not to expect their paychecks owed for the past two weeks -- were told Thursday to head home, and await further instructions.

Aero-News has spoken to a number of sources familiar with the matter, on background. The consensus is that Eclipse is now desperately working to secure a "Hail Mary" round of funding that would keep the planemaker in operation. The outcome of those efforts may be known within the next 24-72 hours.

It is not clear what other measures -- if any -- Eclipse executives are now pursuing in order to stay in business... or whether a possible bankruptcy filing is on the horizon.

Eclipse employees apparently weren't the only ones caught by surprise Thursday morning. State Economic Development Secretary Fred Mondragon told New Mexico Business Weekly he was told of the developments by a third party.

"I heard from an Eclipse contractor this morning that they gathered employees together and told them they could not make payroll, so they were sent home, because they can’t ask people to work without pay," Mondragon said. "The contractor said the assembly staff is not working and the assembly line is apparently shut down.

"I understand the banks put a squeeze on the company, freezing their cash assets," Mondragon added. "The news is not good."

In related news, Aero-News has also heard reports of an imminent Chapter 7 filing for DayJet, which may come as soon as Friday. DayJet -- the largest single customer for the Eclipse 500 very-light-jet -- ceased operations September 19.

1000 MST: The parking lot in front of Eclipse Aviation headquarters off Clark Carr Loop remains mostly full Thursday morning, hours after workers were told they would not be paid for their last two weeks of work... but one must wonder whether that will be the case for much longer, unless an 11th-hour funding miracle comes through.

Perhaps most telling is the fact the lot in front of Sunport 2 -- Eclipse's primary assembly facility -- had only about 15 percent of available spaces filled (shown below) on what normally would have been a busy weekday morning.

Despite the glum news, at least one Eclipse employee remained optimistic. The worker, who declined to give his name, said "there were no layoffs" Thursday morning, adding his understanding of the problem was that "one bank refuses to give another bank the money we need.

"I love working here," the employee added. "I'd work here without a paycheck."

Judging by those empty spaces -- as well as the three workers seen by ANN leaving the headquarters building, carrying what appeared to be their belongings -- not everyone at Eclipse shares that sentiment.

A request for comment from an Eclipse spokesperson has not been returned.

Original Report

0835 MST: From Albuquerque -- Barring a financial miracle, it appears to be another nail in the coffin for Eclipse Aviation. The struggling planemaker told third shift workers Thursday morning their paychecks due on the 15th of this month will not be honored, as the company continues to fight to secure desperately needed funding.

770-KKOB reports first-shift workers filing into Eclipse's production facility are being given the bad news as this is written, two hours after their late-shift counterparts were given the news. KOB-TV added several workers were seen "speeding out of the facility's parking lot" following that meeting.

Workers were reportedly given a sheet of paper with a toll-free phone number to call for updates on the status of their paychecks, which cover the last two weeks of labor.

KOB-TV adds some employees said they were told executives 'stayed up into the early morning hours' trying to find a way to honor their paychecks, but were apparently unsuccessful in doing so.

At this time, Eclipse is still in business... though the sword of Damocles certainly appears to be descending.

ANN will follow this story, and will update it when any more information becomes available.

FMI: www.eclipseaviation.com