US-based kit manufacturer Van’s Aircraft has resorted to Chapter 11 bankruptcy protection while it attempts to restructure, after encountering financial difficulties.
The company, which was founded just over 50 years ago, produces a range of single-engined kit aircraft – including single-seat models such as the RV-3 and the four-seat RV-10 – some of which have aerobatic capability.
Founder Dick VanGrunsven says the Oregon-based company has recruited turnaround specialist Hamstreet & Associates to “help solve our current problems and re-establish a profitable operation”.
“I realise that the term ‘bankruptcy’ is shocking,” he adds. “However, the key word here is ‘re-organisation’ which implies continued operation and improvement. Our doors will remain open and we will continue to work hard to serve our customers.”
Van’s Aircraft disclosed in October that it was facing “serious” issues, after its cash-flow was “strained…to the breaking point” following a “combination of significant events”.
These included higher post-pandemic expenses as orders increased. “Without realising it, we were selling kits below our cost,” the company admits.
Van’s Aircraft fell behind on orders and opted to outsource some manufacturing, to obtain faster laser-cut, rather than punched, components. But it found an “unmanageable” number of customers were requesting replacement of these laser-cut parts.
It also suffered a quality issue with primer used by an overseas contractor, which resulted in aluminium corrosion and forced the company to scrap many kits.
After an assessment of the situation, Van Aircraft filed for Chapter 11 protection on 4 December.
It says it will continue to source, produce and provide parts and service to its customers, and shipping kit orders. The company points out that it has built up a “significant and high-value” parts inventory which it will use to fulfil orders over the next 12-18 months.
“We understand that this situation creates a hardship for everyone involved,” says the company. “However, without these changes we do not see a viable path forward that would allow Van’s Aircraft to remain in business and support its customers.”
