At least three groups of investors have indicated interest in Mooney, but not in its debt load. For that reason, Mooney Airplane Company has restructured itself, shedding debt in the process and changing its name to Mooney Aviation Company.
The former Mooney Airplane Company no longer exists. In a complicated legal maneuver, the company foreclosed on itself. It makes the company more attractive to new investors, but will leave some former investors behind in the process.
In the meantime, Mooney reports it is making new parts every day, and dealers have told the factory they are doing well, or as well as one does in a recession, with used aircraft sales.
To explain the maneuver Mooney has just completed, here is the legal phrasing from lawyers who guided the deal. “Mooney Airplane engaged in a friendly foreclosure as a result of its default under its indebtedness. As a result, substantially all of Mooney Airplane’s assets were surrendered to Mooney Aviation, which is owned by Mooney Airplane’s former senior secured creditors, in satisfaction of their claims. As a result of this restructuring, Mooney Aviation is not subject to Mooney Airplane’s indebtedness.”
The company’s official statement reads as follows: “As Mooney positions itself for the future, the assets of Mooney Airplane Company, Inc. have been transferred to Mooney Aviation Company, Inc. Mooney Aviation Company wants to advise customers that it is currently providing service on all aircraft supported by Mooney Airplane Company, including technical support, service parts and the factory service center based in Kerrville, Texas.”