ALBUQUERQUE, N.M. (AP) -- Eclipse Aviation Corp. will not be put up for public auction this week after the troubled Albuquerque, N.M., jet manufacturer failed to attract any qualified bids by Tuesday's deadline.
Eclipse, after consultation with the Ad Hoc Committee of Senior Secured Noteholders and the Official Committee of Unsecured Creditors, determined there were no qualified bids, said Dan Guyder, a partner with Eclipse's law firm, Allen & Overy LLP in New York.
"There will be no auction," Guyder said.
The lack of bids allows Eclipse's largest shareholder, Luxembourg-based ETIRC Aviation, to move ahead with plans to purchase the company.
ETIRC Aviation had announced it hoped to buy the maker of the six-seat Eclipse 500 when the company filed for Chapter 11 bankruptcy protection Nov. 25 in U.S. Bankruptcy Court in Delaware.
ETIRC affiliate EclipseJet Aviation International Inc. plans to pay $28 million in cash, issue $160 million in new notes and offer 15 percent equity in the company to senior secured note holders, Guyder said.
The buyer also must pay $7.5 million to wind down the business of Eclipse Aviation, which will change its name after the purchase, he said.
The sale to EclipseJet must be approved by U.S. Bankruptcy Judge Mary Walrath, who has scheduled a hearing for Friday on the proposed sale.
More than 30 objections to the sale have been filed with the court, but attorneys close to the procedures said they expect the sale to go forward as planned.
The deadline for objections to be filed is Thursday.
Randall Sanada, a member of the Ad Hoc Customer Committee's steering committee, said the possible sale to ETIRC's affiliate is a "good thing."
The committee has had several conversations with ETIRC about how to allow the company to move forward on a profitable basis, while honoring existing deposits and getting customers their aircraft at a reasonable price, said Sanada, who also is chairman of Westlake Village, Calif.-based Jet-Alliance Inc., Eclipse's first customer.
"They're simply not going to be able to honor all aspects of all contracts that Eclipse had in place at the time of the bankruptcy," Sanada said.
Financing for the sale includes up to a $205 million loan from the Russian Federation Bank for Development and Foreign Economic Affairs, known as Vnesheconombank, and up to $75 million from Spain's AirLyper Investment Partners, according to the purchase agreement filed with the court.
Russian participation in the financing reflects Eclipse's plans to build an assembly site in Ulyanovsk, Russia.
A day after the company filed for bankruptcy protection, chief executive, Roel Pieper, told The Associated Press he was upbeat about the company's future both in Albuquerque and Russia. He said at the time that Eclipse had 1,100 orders for jets on the books.
Pieper, who is also chairman of ETIRC Aviation, said at the time that if the restructuring of the company succeeds, construction of the Russian plant should be completed by mid-2010.
He said he foresaw the Albuquerque location serving China and India, as well as the U.S., while the Russian assembly site would serve Europe.
The bankruptcy proceedings came after a year of turmoil at Eclipse in 2008. The company saw layoffs of more than a third of its work force, an unplanned two days off for workers after the company was late making payroll, the exit of its founder and former chief executive, Vern Raburn, and Federal Aviation Administration directives that have cast doubt on the aircraft's safety.