That forecast was obviously overly optimistic BS. It is going to take deep pockets and patience to pull out of this. Not to mention much better public/customer relations.

"The way to make a small fortune in aviation..."

Got my latest copy of EAA Sport Aviation (February, 2024 edition) and there is not one word about the Vans aircraft situation. One would think that the magazine would explore and report this

Dan

Does Vans buy ad space in the mag? When things don’t make sense, look at the money angle.

Does Vans buy ad space in the mag? When things don’t make sense, look at the money angle.

I don't know what their publication schedule is but it's common for magazines to have cut-off dates a few months in advance of the ship dates.

Van's advertised in January, but not February.
Interesting.

Van's advertised in January, but not February.
Interesting.

I don’t fault them for that. This thing is evolving so quickly, by the time a magazine article came out it would be hopelessly out of date.

I agree, I don't expect them to be like a newspaper but this thread was opened on October 27 of 2023, more than 3 months ago.

I would have expected something on this issue in the mag by this time, even a little blurb in the corner.

Dan

Its been very quite. To me that would seem as if things are not going well. Really hope I am wrong. But with the IO390-119 exp powering a lot of the newer fleet and the wait times coming up on 36-48 months, that would also be an ill omen.

According to the Vans Website the wait for Thunderbolt engines is indeed 3-4 years but the wait for non Thunderbolt engines is 9-18 months which is manageable for build that typically takes more than 2 years. The io-390 exp119 is available as a thunderbolt or non-thunderbolt engine.

There are some things going on.
- On VAF yesterday some noted that they have been waiting on Quick Build kits ordered in 2021. One received bills for a 73% increase in price for an undelivered RV-14A QB Fuselage kit and a 55% increase in price for the undelivered QB Wing kit. A couple others said they got bills with over 50% increase.

* Apparently Vans sent a letter out stating that they would hold price increases to 50% (for now).

- This week was the deadline for Claims Filings against Vans - all creditors - customers, vendors, employees, lenders, tax authorities, etc.
https://www.bmcgroup.com/restructuring/Claims.aspx?ClientID=537 Click on "Show Details"

* There are 532 Claims. Highlights:
Apparently Vans hasn't been paying taxes - Marion County Tax Assessor Collector owed about $110K (secured ahead of everyone else) and Texas State Comptroller about $56K, Tennesse Dept. of Revenue about $30K and the State of Minnesota Dept. of Revenue about $10K.

There are usual suspects like Hartzell - $170K, Portland General Elec. - $20K, Boeing -$17K. I don't see Textron/Lycoming - maybe that is a separate agreement involving 442 engine deposits under contract.

The biggest claims are from the Van Grunsven family - about $9.3 million in total. The Balance Sheet shows that the ESOP also loaned about $730K to Vans and there may be claims under employee names - for instance the HR VP at Vans has about $640K in multiple claims which may be ESOP.

The irony is that although the Builders/customers have completely financed Vans from day one (with their pre-paid advances) and are really the single biggest creditor group - they have no say, no senior rights and no protection in this Chapter 11 "Reorganization". To add insult to injury they, as a group, are committing to provide he real DIP financing by being asked now to allow Vans to break the purchase contracts and to pay upwards of 50% more (and more likely in the future) on the approx. $52 million in annual Revenue. Look at the Balance Sheet - Builders have advanced (loaned) Vans $26.5 million.

In the Reorg Proposal the Van Gruesven family proposes to advance up to about $6 million to Vans at about 10% interest. Where is the interest payment to the Builders for their "loans" of cash to Vans?

This is a pre-packaged reorganization in which the Van Grunsven family holds all the cards. The Van Grunsven family owns a controlling stake in the company hidden in the ESOP. Richard Van Grunsven is the Chairman. Through these years of operational and financial mismanagement, the Van Grunsven family has been fully aware of the negative cash flow and loaned money to Vans which they secured with all the assets of Vans including Intellectual Property. The Van Grunsven family are both secured by all the Assets in Vans and are filing Claims against Vans Aircraft at the same time thereby covering any outcome.

Via Hamstreet advisors, they have rammed this down the Builders throat before they realize what is going on or can organize as a group. In reality, the Builders should be receiving equity, in exchange for allowing Vans to break the contracts and raising prices immediately. Instead they are being told to just be happy that they can get kits at all by paying higher prices.

Vans will likely get through this. Existing builders will pay substantially higher prices than contracted or expected. The Van Grunsven family probably consider the entire process fair since builders "should have been paying 50% more all along...." The Van Grunsven's will get their money/loans back and continue to control Vans. Reputation and relationships will be altered for some unknown period until everyone forgets.

Holy cow.
If there are tax liens, it's probably game over. Sad to say but anyone sending them one cent is probably flushing that money, unless it's for a part you can take immediate delivery of over-the-counter.

I think it is interesting that they say the liquidation value of the inventory is $2.5M vs a book value of $21M. Either the inventory on the shelves is "good" inventory and is worth something like $21M, or it is primarily defective items and has little/no value. If it is junk, they shouldn't have it on the books at $21M, and if it isn't junk, it is worth substantially more than $2.5M.