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Trustee for former Eclipse Aviation seeks OK to make distributions
By Jim Witters
Wilmington, Del., Oct. 5 - The Chapter 7 trustee for AE Liquidation, Inc. - formerly Eclipse Aviation Corp. - is seeking approval of a settlement agreement and authority to make distributions in accordance with the sale order, according to documents filed Oct. 4 with the U.S. Bankruptcy Court for the District of Delaware.
The trustee wants to disburse funds in the "Over and Out escrow account" as outlined in the sale order and in the settlement agreement among Over and Out, Inc., the noteholders and the trustee.
Over and Out filed an adversary proceeding against Eclipse in January 2009, claiming Over and Out had deposited $100,000 or more to Eclipse pre-bankruptcy in connection with the purchase of an Eclipse 400 aircraft.
Over and Out sought the creation of a constructive trust and an injunction barring Eclipse from commingling funds.
When Eclipse completed the sale of substantially all of its assets to Eclipse Aerospace Corp. in August 2009, the court ordered that $3.2 million be held in escrow pending the outcome of the adversary proceeding.
On Sept. 15, 2009, noteholders Kings Road Investments, Ltd., Citadel Investment Group, L.L.C. and HBK Master Fund L.P. intervened, claiming they hold a superior interest in the escrow account.
On June 28, 2012, the dispute went to mediation and agreed to settle the proceeding through a distribution to Over and Out of $1.05 million.
The remaining $2.15 million will be distributed by the trustee after he receives instructions from the noteholders' counsel.
"There is no longer any dispute over entitlement to the Over and Out escrow amount, as all parties claiming an interest in the Over and Out escrow amount have agreed on the terms of its distribution," the trustee wrote in his motion.
A hearing on the trustee's motion is scheduled for 2 p.m. ET on Nov. 14.
Eclipse, an Albuquerque-based aircraft manufacturer, filed for bankruptcy on Nov. 25. Its Chapter 11 case number is 08-13031.
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