Icon Aircraft, creator of the A5 LSA seaplane, is in the spotlight again as bankruptcy proceedings finally come to a close.
Short story: Icon will continue making aircraft, after the bankruptcy heard from a new buyer — not the buyer mentioned before in this recent article. The court sought a change in ownership and an effort to grapple with a large amount of debt.
From beginning (in April 2024) to an end in mid-June, this proceeding moved very swiftly. Here’s the final settlement.
“Icon In a Flat Spin
as Bankruptcy Looms”
Earlier in the day on June 18th, 2024…
Britain’s Flyer magazine reported online that Icon found a buyer but not the one mentioned in the prior link.
“Buy an aircraft manufacturer with a certified product and also selling in the Light-Sport Aircraft class for, what? …£100 million? Try again and aim low: just over £12m ($15.3 million),” wrote Flyer staff.
The UK magazine reported that was the winning bid for the assets of Icon but continue reading.
“£134m ($170m) worth of debt was written off during the bankruptcy case for Icon Aircraft when it came before Judge Craig Goldblatt in Delaware last week,” wrote Flyer.
Earlier, a Chinese buyer was going to absorb the prior debt while paying slightly less for the company. The supposed Chinese buyer never explained how they would earn such a large amount to cover that debt service.
“The winning bid came from a unit of 160-year-old German textile machinery producer Dürkopp Adler. Hang on… why would a manufacturer of textiles want an amphibious aircraft maker? It’s a complicated story,” continued Flyer.
Dürkopp Adler Group describes itself as “a global innovation and technology leader in the field of industrial sewing. We develop, produce and sell high-quality sewing machines and equipment.”
ByDanJohnson.com readers will already know the prior Chinese buyer was also a sewing machine producer. Do you find it odd that two sewing machine companies would vie for Icon? Here’s more…
“Icon Aircraft had already selected SG Investment America Inc. as the stalking horse bidder – the back-up in case of no better bids,” wrote Flyer.
“However, SG Investment is a newly formed subsidiary of Dürkopp Adler GmbH, now owned by ShangGong Group based in Shanghai, China, which also makes sewing machines.” So… these two companies are already affiliated.
Flyer reported the opposition, “According to Law360, a legal reports website, a group of Icon investors — including former directors, officers and founders and other equity holders — filed legal claims against the company’s Chinese majority shareholder in the bankruptcy court, urging it to halt the company’s proposed sale. The group said the stalking horse bidder is indirectly controlled by the debtor’s current majority holder.
“The group of equity holders had asked the court to evaluate what they called ‘insider relationships in play,’ said Law360.
“They alleged that the majority shareholder, Shanghai Pudong Science and Technology Investment Co. Ltd., which has been the controlling equity holder of Icon since 2017, seized control of the management, operated the company as its own property, and systematically dismantled it to expropriate Icon’s intellectual property to China.
“In other words,” Flyer summarized, “Icon has been bought for a song from its main shareholder, writing off its debts in the process and ending up with the intellectual property of the aircraft producer. The Delaware court is due to approve – or not – the deal this week.”
It Is Done
Later in the day, a headline said, “Icon’s Chapter 11 Sale Cleared With Higher Price”
Law360 (paywall) reporter, Vince Sullivan wrote later in the afternoon of June 18, 2024, “Light-Sport Aircraft producer Icon received a Delaware bankruptcy court’s approval Tuesday for a nearly $15.8 million sale of its assets after securing an agreement to increase the price by $250,000, just hours before a hearing on the transaction.”
So settles another chapter in the exiting life and times of Icon Aircraft and their handsome A5 LSA seaplane.
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