Bankruptcy Court Petition Lists "Hundreds" Of Creditors

ANN REALTIME REPORTING 02.19.08 1430 EST: Aero-News has learned Adam Aircraft has filed for Chapter 7 liquidation, effectively dashing hopes the company would manage an 11th-hour funding miracle and continue operations.

"In the absence of additional funding for the company to continue operations, it is ... in the best interest of the company, its creditors, shareholders and other interested parties" to file Chapter 7, the company said in a court filing, according to the Denver Business Journal.

The Denver Post reports the petition was filed last Friday in US Bankruptcy Court in Colorado, and includes "hundreds" of creditors -- including company founder George F. "Rick" Adam, Jeppesen Sanderson, several city and state offices and utilities throughout Colorado and Utah, and Denver's "Wings Over The Rockies" Air and Space Museum.

Also listed as creditors are those who had taken delivery of Adam's A500 twin piston aircraft -- including Mike Leahy, who took delivery of the first A500, and the New Mexico State Patrol, which took delivery of the last A500 shortly before the company announced it was in serious financial trouble.

As ANN reported last week, Adam shut down ALL operations February 11, and laid off its remaining workers... but held open the possibility of a last-minute bailout, with an Adam spokesperson calling rumors of an impending bankruptcy filing "premature."

Sadly, that hope proved overly-optimistic... and the last Adam official, CEO John D. Wolf, tendered his resignation effective February 15.

Hints of significant problems at Adam came to light in January, with the company's annoucement of the layoffs of close to 300 workers, and the suspension of the planemaker's operations in Utah. At the time, the company cited the need to overcome past issues with the certification of its A700 very light jet, and obtain capital to see that program through to TC, as reasons for the decision.

One week later, details of a January 15 letter to stockholders from Wolf came to light, outlining the company's financial issues. The letter stated the company's future hinged on completion of two successful financing transactions, the first of which called for Adam to raise $30.5 million by the end of January. The company reportedly secured $5.5 million of that in late December... but follow-up funding never materialized.

The company delivered approximately seven A500s to customers.

FMI: www.adamaircraft.com