Payment of Aircraft Sales Proceeds to Avantair Share Owners Signals Impending Finale of Fractional Saga
Fractional share owners in the ill-fated Avantair program have finally begun receiving proceeds from the sale of 13 Avanti Piaggio P-180 turboprop aircraft that were auctioned as part of the involuntary bankruptcy proceeding that followed Avantair’s collapse.
The aircraft auctions began last July, but the distribution of funds was delayed for several months when one of the fractional owners challenged the distribution formula. The owner’s objections were rejected by Judge James S. Moody Jr. of the United States District Court for the Middle District of Florida and the judge also declined to stay the distribution while the disgruntled owner appealed the decision to the 11th Circuit Court of Appeals.
The sale of 13 of the Avantair P-180s and the distribution of proceeds to former owners is an important milestone in the long-running Avantair saga and signals the approaching conclusion of the first bankruptcy of a fractional ownership enterprise.
Amanda Applegate, Senior Transactional Counsel at Aerlex Law Group, is extremely familiar with the Avantair debacle, having represented about half of the owners who held Avantair shares through the entire bankruptcy process. Ms. Applegate is also well-versed in fractional ownership from her previous position as associate general counsel and contracts vice president at NetJets for 12 years. Her work on the Avantair matter began more than two years ago when unhappy owners began contacting her for assistance following cancellation of flights, unavailability of lift, and other breaches of their management contracts.
Because of her high profile in the business aviation community and prominent role in the Avantair bankruptcy, Ms. Applegate has been quoted on several occasions by journalists following the Avantair story including an AINonline news brief earlier this week (click here to read). David Esler, a reporter for Business & Commercial Aviation, wrote a detailed two-part expose on the demise and bankruptcy of Avantair and the complex legal and logistical mess that ensued in the wake of the company’s failure. Esler’s first installment, “Arrivederci Avantair: A Cautionary Tale” was published online on December 1, 2013. The second, “The Avantair Failure, A Cautionary Tale, Part 2” appeared on May 1, 2014. Ms. Applegate is quoted extensively in Part 2 of Esler’s series.
Esler’s articles have now been nominated for an important journalistic honor, the Jesse H. Neal National Business Journalism Award, often called “the Pulitzer Prize of the business media.” Conferred by the Association of Business Information and Media Companies, the Neal awards are the industry’s most prestigious and sought-after editorial honors. To read Esler’s portrayal of the events that led to Avantair downfall and the fall-out from that collapse, see his articles here (part one) and here (part two).