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Mon, Mar 16, 2009

Former Eclipse Customers Jump Into Bidding Fray

Eclipse Jet LLC Led By Members Of Ad Hoc Customer Committee

First, there was Eclipse Aviation Corporation; then, when that company entered Chapter 11 bankruptcy last year, a foreign-backed entity named EclipseJet Aviation International purported to rescue the diminutive planemaker from the ashes. That promise proved to be a spectacular failure... and Eclipse entered Chapter 7 liquidation last month.

Now, as the assets of the once-promising Albuquerque, NM-based manufacturer go out to bid, several entities have made known they intend to purchase the assets, and at least in some fashion rescue the brand. A new group, called Eclipse Jet LLC, threw its hat into the ring last week... and its leaders say they will offer what competing bids do not.

Eclipse Jet LLC was formed by the leaders of the Ad Hoc Customer Committee and Steering Committee, formed in December 2008. Mike Press -- a retired USAF colonel who took delivery of the fourth production Eclipse 500, and runs a private company to broker Eclipse delivery positions -- teamed with position holder and 60 percent depositor Mason Holland to organize a group of owners and depositors to bid to acquire the assets of Eclipse, with the intention of providing both support for existing customers, as well as restarting production of the Eclipse 500.

Press says he brings 20-years of aircraft manufacturing experience working for Northrop Grumman and Boeing to he table, while Holland is a 24-year veteran of private equity acquisition and founder and Chairman of one of the leading insurance-benefit software companies in the US.

"Many of the owners are my personal friends, whom I've introduced to Eclipse and sold them their aircraft," said Press. "I am responsible for them, and Mason and I have organized an exceptional team to lead a bid to fulfill my responsibility to current Eclipse owners and depositors. Mason and I have been very careful to hand pick a team that brings to bear industry experience and expertise in the formation and capitalization of enduring ventures. We believe that our work will benefit Eclipse owners and depositors in the near and the long term."

"I have been a depositor with Eclipse and an active member in the E5C for five years," Holland added. "I see the opportunity today to both restore the vision of Eclipse and honor the company's commitments to owners and depositors. Further, based upon my experience in starting and operating technology companies, I see the opportunity to reorganize Eclipse as a sustainable company in the aviation industry."

To date, two other competing bids for the Eclipse assets have been made public. Eclipse Services and Support LLC is the name of the cooperative backed by Linear Air CEO Bill Herp, that intends to bid on technical and support assets to keep the existing fleet of 259 Eclipse 500 very-light jets in service. Another plan, backed by aerospace executive Phil Friedman, intends to purchase all assets under the auspices of his company New Eclipse Acquisition LLC, to both provide support to existing owners and to eventually start producing new aircraft.

Eclipse Jet says those plans -- as well as other private bid attempts rumored to be in the works -- "appear to exploit the predicament faced today by Eclipse owners," by relying on the captive Eclipse 500 customer market to accept high parts and labor prices in order to create a solvent enterprise. Furthermore, only Friedman's bid says anything about restarting Eclipse 500 production.

"The owners need service and support and many of the depositors still have the dream of flying a jet aircraft. We are going to fulfill both objectives," says Press. "While we do not want to compete with the "Co-op" plan, we know the only true way to reduce Eclipse 500 operating costs is to form a professionally-managed aviation company that builds long-term, growth relationships with vendors and suppliers, expanding the Eclipse 500 fleet to generate key economics of scale.

"We agree with David Green's (leader of the "Co-op" plan) estimate regarding the value of the assets at $10-20 million, but we intend to capitalize Eclipse Jet with considerably more capital to better serve owners and depositors and offer them options the "Co-op" plan cannot afford," Press concluded.

Eclipse Jet intends to announce the details of its plan shortly.



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