Van’s Aircraft announced Monday that it had filed for Chapter 11 bankruptcy protection. The company pointed to recent material and financial challenges and emphasized that this move is crucial for its reorganization.
Van’s stated it will maintain operations, producing and delivering parts, servicing customers, and fulfilling kit orders, operating under court supervision for 90 days.
Van’s cited recent contributing factors in its statement, including that it faced material challenges such as a debacle with faulty primer, which caused corrosion in many kits, and problems with its transition to laser-cut parts. These challenges led to significant cash-flow problems.
“During that time, Van’s built up a significant and high-value parts inventory. As we manufacture the additional parts needed to balance this inventory, we will leverage it to fulfill orders for kits and parts over the next 12 to 18 months,” the statement says.
Van’s acknowledged the hardship caused to its stakeholders by the Chapter 11 filing, including customers, suppliers, and employees—but expressed the necessity for these changes to secure the company’s future.
The company provided updates on internal programs addressing inventory control, manufacturing delays, and issues with laser-cut parts. It has developed and revised strategies for impacted customer groups, including those needing replacement parts, customers with kit deposits, and those with deposits on engines, propellers, and avionics.
Prices, including for parts, will likely see a blanket increase. Van’s founder, Dick VanGrunsven, who had been essentially retired, has stepped in to help the company financially, according to the declaration, submitted by Clyde Hamstreet of Hamstreet & Associates. In addition to loaning the company more than $10 million in the last two years, the declaration indicates VanGrunsven plans to seek court approval for a post-petition loan from the VanGrunsven Trust, up to $6 million.
Customers with laser-cut parts will receive detailed lists of what’s affected, and they can expect replacement parts by the end of 2024, according to the statement. Those with kit orders will be contacted within 7 to 10 days, offering to apply existing deposits with “new terms and conditions including an increase in price.” Shipping for in-stock kit orders is expected to resume within a similar timeframe.
Editor’s note: This story originally appeared on Kitplanes.com.