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Vans have made a big boo-boo: laser cut holes

IO390 wrote:

This thread is getting way too personal guys, with some insults thrown around. Remember we’re discussing our expensive toys here, it’s not the end of the world. Some of you could tone it down a bit perhaps?

I agree. Lest there be any doubt concerning my posts, my participation here is intended to be a civil and respectful exploration of experiences, ideas, and informed opinions, not a bash-fest of people or organizations. I know it is often difficult to capture the intended tone of a message when posting in a forum, so I would like to make it crystal clear that I am not typing with my fists. I appreciate the diverse range of experience and opinions expressed here, even those that do not align with my own.

1C5, United States

Since October some people having put orders in the Van’s store have Sling Aircraft show up on their credit card statement. Greg is saying that is just a glitch. Has anyone heard of such a glitch?

United States

Latest news from Van’s:



The elephant is the circulation
ENVA ENOP ENMO, Norway

December 4, 2023, Van’s Aircraft filed for protection under Chapter 11 of the federal bankruptcy code

Dan
ain't the Destination, but the Journey
LSZF, Switzerland

Interesting times ahead.

The elephant is the circulation
ENVA ENOP ENMO, Norway



Debtor – in – Possession financing is specialised but relatively low risk. It ranks behind any secured lenders at the time of filing, and typically secured on relatively liquid assets, for example receivables. So while commendable, the founders are providing the DIP finance, and hopefully it will see the organisation through approval of a plan, it shouldn’t be confused with equity. Arguably they might make the facility a bit larger, and less secured, to ensure the unsecured creditors, in effect the shareholders in bankruptcy reorganisations of this relatively small size, can’t easily file a plan of their own. The plan is voted on by the unsecured creditors and they would be represented by an unsecured creditors’ committee UCC. Secure lenders, assuming they have adequate security and are kept whole, tend to be relatively passive actors in the plan.

It is quite a clever tactic as it complicates the option for the UCC to bring in a private equity buyer. With such a large installed base of operating aircraft, and presumably without the product liability issues of a certified manufacturer, the business is probably quite valuable with a simplified product line and as a parts supplier.

Oxford (EGTK), United Kingdom

What makes it a neat little plan is that Van himself is the only secured creditor anyway. His prior loans (for expansion in 2021, the new punch press in 2022 and cashflow bailouts this year) are all secured on the buildings, machinery and IP – the only tangible assets.

I expect it to go through on the nod, basically because there are no other options besides liquidation. You could describe this as a semi pre-pack. The enforced price rises will basically amount to every customer with a deposit down losing it and having to pay again, plus a price hike to put each kit sale back in the black and cover a portion of paying the major unsecured creditors.

Lycoming are the largest unsecured creditor and being a sole-source supplier they’re not going to take a haircut. The promise is likely to be that the 20 largest unsecured get paid in full, thus securing rapid approval of the plan.

Van will retain full control. His (likely majority) ownership, his prior loans and DIP funding will be safe. The whole thing will be paid for by the customers with deposits down, some 1,500+ individuals will each pay anywhere between $1k and $15k to cover this costs of this mismanagement.

The plan doesn’t really touch the LCP issue, other than putting some small amount aside for rectification. No detail on who gets what or when.

The only weakness I can see in the plan is the assumption that money just starts rolling in again and demand remains high. Not much allowance seems to have been made for the inevitable lack of trust when you shaft your customers like that. VAF is full of a few noisy cheerleaders who boast that they trust the company and will gladly wire them their life savings without so much as an estimated delivery date, but I suspect the silent majority of customers are more circumspect with their funds.

Last Edited by Graham at 06 Dec 11:39
EGLM & EGTN

VAF is full of a few noisy cheerleaders who boast that they trust the company and will gladly wire them their life savings without so much as an estimated delivery date, but I suspect the silent majority of customers are more circumspect with their funds.

Or they simply take realistic view on this. What’s the alternatives and so on. The truth is, there’s simply no alternative. I think the “silent majority” takes this rather relaxed, and decides the best way forward is as a producer of an aircraft rather than a “consumer” of aircraft parts. It’s not like the value of an used RV will go down when kit prices are increasing.

The elephant is the circulation
ENVA ENOP ENMO, Norway

His prior loans (for expansion in 2021, the new punch press in 2022 and cashflow bailouts this year) are all secured on the buildings, machinery and IP – the only tangible assets.

Good tactic and I do the same – register a fixed and floating 1st charge on a new business, which avoids any accusation that it was done in anticipation of trouble. The “slight problem” is that IME most banks will not open an account for you! Yes, even with no overdraft allowed, the brainless banks won’t. But clearly Vans found they can (which doesn’t surprise me because UK retail banks must be the most brainlesss of all).

I suspect the silent majority of customers are more circumspect with their funds.

There is no alternative to Vans – most in that sphere would say RVs are simply the best, and most of the rest of the business exists simply because most cannot afford an RV.

But it isn’t that hard to enter the kit market. The barrier to entry is low. Anyone familiar with running a manufacturing business, and in possession of drawings, can contract out the whole lot to the chinks (etc). If I had nothing to do and no life, I could start tomorrow… The only Q is which design (that flies well) is open-source.

Administrator
Shoreham EGKA, United Kingdom

LeSving wrote:

I think the “silent majority” takes this rather relaxed

The facts that have led us to this point suggest otherwise. The numbers are clear, and the company ran out of money because customers stopped trusting them and stopped sending them money.

As I said, the only weakness in the plan is the assumption that sufficient trust remains for money to start rolling in again.

Here’s a list of what is counting against them in the trust stakes right now:

1) A series of really dumb management decisions
2) Trying to argue black was white about cracked LCPs
3) Reneging on a prior commitment to replace all LCPs
4) Missing every shipping estimate for the last couple of years
5) Missing the deadline for every promised update in the last few months
4) Blaming everything on outside forces and never once apologising
6) Trying to collect a lot of early final payments back in October when they obviously knew the the writing was on the wall (in the UK this would mean a criminal prosecution for trading whilst insolvent, I don’t know if there is a US equivalent)
7) Prioritising the shipping of tail kits in recent months in order to add to the pool of ‘captive customers’
8) Putting forward a Chapter 11 plan that ultimately sees the customers pick up the tab for the whole mess

EGLM & EGTN
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