[spatsch]

Any mention concerning how current LCP affected customers will be handled along with those of us with QB kits that are full of LCP and unable to produce due to the defective LCP? I have my entire -14 QB kit sitting on the hangar floor….fully bought and paid for, but unable to commence building due to the LCP issue. So, a few of the questions I have are:

1. Is my QB kit going to be replaced?
2. Am I going to be supplied parts but am going to have to make the repairs to my QB myself? If so, will I be refunded the premium that I paid for the QB option?
3. Where on the “priority” list do I stand?

If I understand the attached excerpt from the motions correctly (I am not a lawyer I just read stuff..) Van's will notify everybody that they will need to file ANY claim for any reason by a certain date. It lists a fairly long list of possible claims including laser cut parts and anything discussed on vansairforce... .

I know that doesn't tell you what remedy you might get but it does highlight part of the process.

Oliver

 

[Mark33]

I haven’t seen or heard any specifics (i have read the filings and listened in to the hearing) on this topic. So everything below is my (weakly) informed opinion.

Unless the court demands specifics in the plan (I suspect they will not) Van’s will be allowed to handle these “product quality issues” using their business judgement and discretion, subject to their available financial resources, after emerging from Chapter 11 (and paying other creditors).

I am not a lawyer, but I suspect your “claim” should you file one, will be disputed by the company and rejected in the Chap 11 disposition. The company will argue they have fulfilled their obligation to you when you “accepted delivery.” It’s not as if a legal judgement had been issued against the company pre-petition, or any written compensation agreement had been reached. You may have a valid dispute, but the court may well not regard it as a valid unsecured claim. In the best case you’d have an unsecured claim and likely recovery will be very low.

That said: I suspect “new Van’s” (the post bankruptcy going concern) will find it in their best interest to NOT abandon customers impacted by LCP. To do so will impair their reputation and be devastating to new orders which are critical to their survival. If I were Van, I’d work very hard to replace (at cost of shipping only) the “RED” parts that they have assessed as “critical to safety.” To do otherwise would potentially subject individuals to liability (personally) in the event of LCP’s “causing” an injury. Replacing QB kits might be impractical financially, so maybe you’ll get a pile of parts and instructions on how to replace them in your QB assembly. I suspect they will require you to sign something saying you will not use any LCP parts which are replaced by punched parts and waive any liability if you choose to use the “RED” LCP parts anyway.

Huge unknowns in this entire situation, and “new Van’s” (as the DIP) will have a lot of discretion in the process going forward. The best hope in my opinion is substantially improved business management operating a recapitalized firm profitably. Lots of trust will be required, and lots of trust has been destroyed. Very tricky to execute successfully. Unless there is a more generous “white knight” than Van, willing to put more money in to (in essence) purchase the post bankruptcy firm, I don’t see a better alternative to the current plan.

FWIW: I see a lot of incompetence in what has occurred, but no bad faith. I do think Van (in particular) is working to make the best of a very bad situation.

Peter

Thank you for your detailed analysis. It sounds like there’s still a lot of unknowns and the pathway isn’t very well lit. I guess there’s still a lot of hurry up and wait. Like a lot of other people that’s caught up in this mess, along with the potential of losing lots of time along with tens of thousands of dollars, it sure does take the “RV grin” off of my face.

 

[Mark33]

If I understand the attached excerpt from the motions correctly (I am not a lawyer I just read stuff..) Van's will notify everybody that they will need to file ANY claim for any reason by a certain date. It lists a fairly long list of possible claims including laser cut parts and anything discussed on vansairforce... .

I know that doesn't tell you what remedy you might get but it does highlight part of the process.

Oliver
View attachment 52221

Thanks for the attachment. Hopefully we’ll have a clearer picture as to what to expect before long.

 

[ravenstar]

While we're talking about how many customers with deposits will choose to agree to the new prices, I wonder how many customers there are like me who had not yet placed deposits on their final kits and are waiting in the wings to see how this all shakes out?

I've got enough parts to keep me busy for many months so I was planning on holding off on my order anyway, but I'll wait a little longer now to be certain I really will be able to finish. That's potential income for Van's that isn't on their books in any way yet (understandably), but which may help them out if they can get their shipping schedule back on track.

 

[cessna1tengobravo]

Consumer Deposit Priority

There was some mention of "consumer deposit priority" or some phrase like that. It seemed to imply that deposits weren't lowest priority in the bankruptcy hierarchy. Did I hear that right and can someone elaborate?

Just based on some googling, it appears that there is a concept in Bankruptcy Law that a consumer deposit up to a certain amount is considered a priority claim above unsecured creditor claims. The amount seems to be $3350, anything beyond that would become standard unsecured creditor claim.

If you had a deposit for a single kit, this may change the equation on whether you would cancel or not as you have a much more likely chance of getting your deposit back.

I'm in no way an expert on this, so anyone knowing better please correct me.

 

[JMS1198]

Maybe Ben Ellis has an answer to that.

 

[pjc]

Just based on some googling, it appears that there is a concept in Bankruptcy Law that a consumer deposit up to a certain amount is considered a priority claim above unsecured creditor claims. The amount seems to be $3350, anything beyond that would become standard unsecured creditor claim.

If you had a deposit for a single kit, this may change the equation on whether you would cancel or not as you have a much more likely chance of getting your deposit back.

I'm in no way an expert on this, so anyone knowing better please correct me.

IANAL (either) but know that in ordinary Chapter 11 cases customer deposits (up to the limit) are treated as Priority Unsecured Claims. There may be an exception under Subchapter V (which Van’s is attempting to use) but I am not aware of it. A priority claim generally has to be paid in full before other Unsecured Claims are paid.

If this is correct then customers with small deposits could be refunded in full if they do not accept the increased price.

This is getting a bit arcane, I would advise securing competent counsel before making irreversible or substantial decisions.

Peter

 

[GregInIdaho]

Seems they have a whole bunch of sheet alum inventory. However, from my understanding, the bulk of the missing pieces necessary to ship kits is 3rd party stuff - weldments, fiberglass, hardware, etc. It would seem that Vans has been able to make parts way faster than their suppliers. It would seem that issue needs to get addressed ASAP if they intend to ship complete kits.

Larry

It could be that these are limiting items because Van's may have hit their credit limit with these vendors. We don't know.

 

[bmellis11]

Just based on some googling, it appears that there is a concept in Bankruptcy Law that a consumer deposit up to a certain amount is considered a priority claim above unsecured creditor claims. The amount seems to be $3350, anything beyond that would become standard unsecured creditor claim.

If you had a deposit for a single kit, this may change the equation on whether you would cancel or not as you have a much more likely chance of getting your deposit back.

I'm in no way an expert on this, so anyone knowing better please correct me.

I'm no expert on this, but I did look it up. You are correct, a consumer deposit, up to $3,350 per individual (not per claim) gets treated as an unsecured priority claim. The way I think of that in this case is that you would get $3,350 before Lycoming and the other non-customer deposit general unsecured creditors would get something. That's assuming they follow the "absolute priority rule" in the plan, which isn't required in a Subchapter V case. So, not a bankruptcy practitioner, but I don't think this priority claim does us much good.

 

[JMS1198]

How to Track Recent Filings

Pacermonitor.com
Case # 6:23-bk-62260

3 new filings on 12/11