"I infer that "administration" is something akin to USA bankruptcy (Chap. 11
?), (Chap. 7?), insolvancy (?).
Can anyone with knowledge of the legalities enlighten our group?
Surely "administration" must include some necessary filings or public
record"
Sure, Fred. A bit of background: I used to live in the US so I've some
familiarity with your system, and I've been involved in a company that's
gone bust over here (not my fault, I hasten to add, I was a creditor!) so I
know ours only too well.
Chapter 11 is a close analogy.
In summary, when a company cannot pay its debts it can apply for
receivership or one-or-more of its creditors can apply for receivership. A
petition is heard in the High Court and if the judge grants the petition, he
appoints the Official Receiver. The company is then said to be 'in
receivership' or 'in administration', the shareholders (mostly Keith Wilson
in this case) lose everything, and the receiver has total control of the
assets. It is his legal duty to get the best value he can for those assets,
and to pay the creditors equally a number of pence in the pound (i.e. if he
raises GBP150k against a debt of GBP300k, he will pay 50p in the pound).
There may be 'preferential creditors' (usually the Inland Revenue, but I
dont believe that's the case here) who get first call on the money, and
often grab all of it.
So, the receiver now owns Europa Management International Ltd. He can
continue to run the company and find a single buyer for all the assets (the
stock, the demonstrators, the goodwill, the Intellectual Property, etc.) or
break them up and sell them piecemeal.
Putting a finger in the air, the most likely resolution is that someone will
now buy all the assets, retain those staff they choose, and resume trading
with a clean sheet. The existing creditors will get a percentage of what
they're owed (leaving an unpaid balance which can in turn drive indebted
suppliers into administration), but "New Europa Aircraft Company" will not
have the debt burden hanging over them.
We as builders will lose the investment we have made in a 'build support
contract' with EMIL (which is included in your kit price). Whether NEAC
chooses to support us for a nominal fee or charges a more commercial rate is
up to NEAC. Obviously that decision will affect individuals' view of NEAC
and their willingness to buy their firewall-forwards from them, for example.
The sharp-minded will recognise that an unscrupulous individual could call
in the receivers and then buy the assets and start again with a clean sheet.
This is called 'doing a Phoenix', but I dont believe it is what is
happening here.
We must now wait and see what happens while the legal process makes its
usual laborious progress. A fair estimate would be that a resolution of the
situation and restoration of parts shipping will take 3-6 months (unless the
receiver chooses to continue trading, buying stock off suppliers with new
funds received for orders, which is quite possible). My advice would be to
get on with your building with what you have and keep an eye on proceedings.
One thing I would like to say is that in my opinion this could be a very
good step forward for the Europa type. We are going to get an impossible
situation resolved and there is now the opportunity for the type to continue
production and some of the improvements in the pipeline to be realised.
Unfortunately it's going to be pain in the meantime for most of us, and my
heart goes out to those poor souls who've paid good money and received
nothing - I hope NEAC can do something for them, and I hope that action can
be taken against those responsible for the mess at EMIL to recover more
funds for them. Such action is in the receiver's remit, I believe.
Sorry the above is long-winded, but I hope it's useful to those who have no
experience of how such things work in the UK.
Kind regards,
Jeremy
Jeremy Davey
Europa Monowheel 537M G-EZZA
Tail done
Standard XS wings with mods underway
CM ready for installation in fuse (with airbrakes fittings)
1200 build hours to date
Intended fit:
Rotax 914 turbo, Airmaster CS fully-feathering prop
Lots of lights, buttons, switches, gizmos, and alarms
-----Original Message-----
From: owner-europa-list-server@matronics.com
[mailto:owner-europa-list-server@matronics.com] On Behalf Of Fred R. Klein
Subject: Europa-List: What future for Europa Customers
Nevllle/Ray have written:
> Europa are now in administraton - the administrator wishes to seek out
> interested parties who may wish to buy the company.
I infer that "administration" is something akin to USA bankruptcy (Chap. 11
?), (Chap. 7?), insolvancy (?).
Can anyone with knowledge of the legalities enlighten our group?
Surely "administration" must include some necessary filings or public record
(?).
Fred
A194
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