Deal could save Evergreen museum
Bankruptcy court will consider sale of planes, buildings to undisclosed buyer
Evergreen Vintage Aircraft may have struck a deal that would settle some of its debt and allow its planes and property to remain on loan to the Evergreen Aviation & Space Museum, attorneys stated at a short bankruptcy court hearing last week.
On May 19, attorneys representing EVA and its creditors including Umpqua Bank will meet again for a hearing to discuss and potentially approve a settlement that would see the 15 vintage EVA planes on display at the museum, as well as the museum and theater buildings, sold for about $22 million to an unnamed buyer.
The potential settlement, which comes after a recent three-day mediation process where EVA and some of its creditors worked to come to an amenable solution for all parties, would also allow the planes and buildings to remain on loan to the museum.
All parties involved, with the exception of World Fuel Services, met and came to a global settlement designed to definitely put the museum in a place to thrive, EVA attorney Nicholas Henderson said after the hearing, adding that the settlement would resolve a lot of litigation in Yamhill County as well as the foreclosure that Umpqua Bank had attempted on EVAs assets.
The settlement represents a significant change for the fate of the 15 aircraft in question, which were a day away from foreclosure and a sale by Umpqua Bank to Erickson Aviation in December, when EVA filed for bankruptcy, triggering an automatic stay and halting the transaction.
EVAs bankruptcy case is one part of the wider financial troubles the various Evergreen entities have experienced over the past several years. In December 2013, Evergreen International Aviation Inc. and a number of its affiliates filed for bankruptcy with more than $500 million in debt and only about $100 million in assets. Since then more than 5,000 companies and individuals came forward seeking payment for services rendered to EIA.
Over the following year EIA sold off a number of its assets, including planes and properties. One of EIAs subsidiaries, Evergreen Helicopters, sold to Erickson Air-Crane Inc. for $250 million in a deal that included 64 aircraft.
As that massive bankruptcy case continued to unfold EVA filed for bankruptcy in December 2014, fueling speculation that the museum, which is operated by a nonprofit separate from the Evergreen companies, would be affected by the case as EVA owns some of its buildings, land and aircraft.
The EVA bankruptcy had followed years of the company accruing debt and interest and in 2014 defaulting on its loans, including failing to pay more than $41 million to its single largest creditor, Umpqua Bank. Because the bank had secured credit in 15 of EVAs planes, it began looking for a buyer for the rare aircraft in order to recoup some of its money. Erickson Aviation, the bank said, represented the most realistic buyer of EVAs planes.
One other potential buyer, a Boston-based nonprofit called the Collings Foundation, expressed interest in purchasing the planes and property in order for them to remain at the museum, but according to foundation president Bob Collings the deal was rejected by Umpqua Bank due to some of its terms.
Erickson Aviation had created a $11.2 million escrow account to complete the sale at the time of EVAs bankruptcy filing and for several months following the automatic stay halting the sale Umpqua Bank asked the court to allow the Erickson sale to proceed. The bank argued that EVA had no equity in the 15 aircraft as the secured claims against the company, totaling more than $50 million, exceeded the value of the planes.
The bank also stated there was little chance of an effective reorganization of EVA as it had no money on hand.
The debtor has recently suggested that a new plan sponsor will fund its reorganization, but the debtor has yet to reveal any plan from such a white knight, Umpqua Bank said in a January court filing.
The new potential settlement could be a partial realization of that white knight scenario, as the unnamed buyer would pay out $22 million but allow EVAs property and planes to remain onsite as part of the museum.JW_DISQUS_ADD_A_COMMENT