Bankruptcy auction set for Icon Aircraft
The next steps in the Icon Aircraft bankruptcy proceedings are set for next month as company executives seek to keep the business intact and prevent investor groups from selling off its assets piece by piece.
The U.S. Bankruptcy Court for the District of Delaware has scheduled an asset auction for Icon on June 13 at 10 a.m. Eastern time with qualified bids due by June 10. The court will hold a confirmation hearing on June 18. The company filed for Chapter 11 bankruptcy April 4, and announced at the time a plan for Icon “to address its current challenges and emerge with new ownership—stronger than ever—and continue building amazing planes with a focus on innovation, safety, and incredible flying experiences.”
“The decision to designate a stalking horse bidder underscores our commitment to ensuring the long-term viability of our business,” said Icon CEO Jerry Meyer. “We believe that this proactive approach will help employees, partners, and customers have confidence in our ongoing operations, enabling the company to achieve the best possible outcome.”
Icon previously said it had secured debtor in possession financing and planned to pursue a speedy sale.
Icon is one of many aircraft manufacturers that formed after the FAA established the light sport category in 2004. These small aircraft designed to carry no more than two people were meant to be simple and relatively inexpensive to construct, certify, and operate compared to standard category models. Pilots are able to operate light sport aircraft, or LSAs, under a different certification process requiring training that is less demanding than for a private pilot certificate.
As has often been the case with concepts for affordable aircraft, the purchase price for the Icon A5 amphibious airplane increased considerably between the time the company began taking orders and again when it began deliveries. Certification took longer than expected, and some potential customers lost interest. Economic pressures arising from the COVID-19 pandemic also hurt sales while related supply chain disruptions slowed production.
The company said it will continue to operate normally during the bankruptcy process while working with the FAA to receive production certification for the type certified version of its A5, which will allow the company to expand sales into markets outside the United States that do not recognize the light sport category.
“We are grateful for the continued support of our owners, partners, and the aviation community as we navigate this challenging period,” Meyer said. “With the assistance of our stalking horse bidder and the expertise of our professional team of attorneys and advisors, we are confident in our ability to deliver a stronger and more resilient company to a successful purchaser following the court-supervised sale process.”
