Adam Aircraft Industries

Infobox Company
company_name = Adam Aircraft Industries
company_
company_slogan =
company_type = Private
foundation = 1998
location = Centennial, Colorado [Cite web
title = "ColoradoBiz" magazine "In Biz", 6/7/2007-6/11/2007
accessdate = 2007-11-17
url = http://www.cobizmag.com/inbiz.asp?search=archives&id=1624]
key_people = George F. Adam, Jr. and John C. Knudsen (Founders)
industry = Aerospace
products = Aircraft
Adam A500
Adam A700
revenue =
operating_income =
net_income =
num_employees = 525 (2007)
parent =
subsid =
homepage = [http://www.adamaircraft.com/ AdamAircraft.com]
footnotes =

Adam Aircraft Industries (AAI) is an aircraft manufacturer founded by George F. Adam Jr and John C. Knudsen in 1998. The company was based at Centennial, Colorado [Cite web
title = "ColoradoBiz" magazine "Playmakers", 3/13/2006-3/20/2006
accessdate = 2007-11-17
url = http://www.cobizmag.com/playmakers.asp?search=archives&id=147] , though the postal designation of nearby Englewood was commonly used in its mailing address.

Located at Centennial Airport, the company was developing a pair of related civil personal and business aircraft, the piston-engined Adam A500 and the turbofan-powered Adam A700 AdamJet. The latter was one of the new Very Light Jets (VLJs) currently under development by several newly-established aircraft manufacturers.

One of the first Adam A500s manufactured, A500 s/n 0002, was featured in the 2006 Michael Mann film "Miami Vice".

In conjunction with other partners, the company had also won a major contract from Defense Advanced Research Projects Agency (DARPA) for the development of a next-generation rotorcraft, potentially signaling its longer-term product development plans.

Adam Aircraft ceased operations on 11 February, 2008 cite web|url = http://www.avweb.com/avwebflash/news/AdamAircraft_SuspendsOperations_Closing_197121-1.html|title = Adam Aircraft Suspends Operations|accessdate = 2008-02-11|last = Niles|first = Russ|authorlink = |year = 2008|month = February] , and filed for Chapter 7 bankruptcy on 15 February, 2008 cite web|url = http://www.eaa.org/news/2008/2008-02-20_adam_aircraft.asp|title = Time, Money Run Out For Adam Aircraft
accessdate = 2008-02-26|last = Experimental Aircraft Association|first = |authorlink = |year = 2008|month = February] cite web|url = http://www.denverpost.com/search/ci_8305142|title = Adam Aircraft files Chapter 7|accessdate = 2008-02-19|last = Yamanouchi|first = Kelly|authorlink = |year = 2008|month = February] .

In April 2008, the assets of the former Adam Aircraft Industries were purchased from bankruptcy by AAI Acquisition Inc. cite web|url = http://www.avweb.com/avwebflash/news/AdamAircraft_CourtApprovesSale_AAIAcquisition_197620-1.html|title = Court Approves Adam Sale To Russian-Backed Firm|accessdate = 2008-04-12|last = Niles|first = Russ|authorlink = |year = 2008|month = April]

List of aircraft

* Adam M-309 CarbonAero - (2000) Twin-piston engine centerline thrust technology demonstrator aircraft built for Adam Aircraft by Scaled Composites
* Adam A500 - (2002) Twin-piston engine centerline thrust six-person aircraft. Development of M-309
* Adam A700 AdamJet - (2003) Twin-turbofan engine six-person (+1 in optional belted lav) aircraft, with configuration similar to A500

Financial problems and cessation of operations

In January 2008 it was announced that Adam Aircraft was having problems raising the capital required to complete certification flight testing of the A700 jet and to enter full production of the A500 piston aircraft. As a result the company closed its Ogden, Utah plant and laid off 300 workers. cite web|url = http://www.avweb.com/avwebflash/news/AdamAircraft_LayOff_300Workers_196976-1.html|title = Adam Lays Off 300|accessdate = 2008-01-18|last = Niles|first = Russ|authorlink = |year = 2008|month = January]

Adam Aircraft President Duncan Koerbel said was quoted as saying:

"To provide for our future growth, we must be strategic in our focus by managing current cash expenditures to ensure adequate time to secure financing for the long term. We're off to a good start in this effort with assistance from our partner, Citibank, but we need to be able to provide them with sufficient time working with potential investors to secure long term financing."

The company indicated that it needed to raise between USD$75 and $150 million to produce the A500 and complete certification of the A700.

In a letter to shareholders released on 22 January 2008, Adam Aircraft CEO John Wolf indicated that the company would face "liquidation" if it could not raise an additional USD$25M in the seven days that remained before the end of January, 2008. The company had loans due and could not pay them without the additional funds. cite web|url = http://www.avweb.com/avwebbiz/news/BizAv_Adam_Needs_Immediate_25MillionDollars_Funding_197001-1.html|title = Adam Needs an Immediate $25 Million|accessdate = 2008-01-24|last = Niles|first = Russ|authorlink = |year = 2008|month = January]

On 11 February 2008 the company ceased operations, issuing a short news release indicating that it was "due to the inability of the company to come to terms with their lender for funding necessary to maintain business operations."

On 14 February 2008 it was reported that employees of the company were optimistic that operations would be able to continue under new financing. At the same time aviation industry leaders believe that the company would not be saved and that there would be no choice but to have it liquidated. cite web|url = http://www.avweb.com/eletter/archives/avflash/1051-full.html|title = Adam Employees Hopeful, Industry Less So|accessdate = 2008-02-14|last = AvWeb Staff|authorlink = |year = 2008|month = February] This prediction turned out to be correct as the company filed for liquidation under Chapter 7 on 15 February, 2008

The municipal government of the City of Pueblo, Colorado has demanded that USD$2M in financial incentives paid to Adam Aircraft must be returned. As part of its agreement with the city, Adam Aircraft agreed to create 448 jobs. The company had only created 90 jobs, almost all of which had been eliminated in the previous round of lay-offs in January, preceding closure. The city has filed liens against Adam Aircraft's physical equipment that is in buildings that the city owns, to recover the money owed.

New ownership

On April 11, 2008 a Colorado bankruptcy court approved the sale of the company to AAI Acquisition Inc. for $10 million. AAI Acquisition is jointly controlled by Russian firms Industrial Investors and Kaskol.cite web|url = http://www.kommersant.ru/doc.aspx?DocsID=916236|title = Life after death |accessdate = 2008-08-01|last = Rusiaeva|first = Polina|authorlink = |year = 2008|month = July] Industrial Investors is a private equity management company with $3 billion in assets, notably Far East Shipping Company. According to their statement, former Colorado Governor Bill Owens is a director of one of its companies. In a statement AAI VP Dmitry Shokhin said: "We plan to revive Adam Aircraft's operations, including continuing the process of certification for the A700 jet,"

Industrial Investments has restarted work on the A700 and in May 2008 had 60 employees back at work. Industrial Investments reportedly ordered 75 A700s prior to Adam Aircraft's bankruptcy. cite web|url = http://www.avweb.com/avwebbiz/news/BizAv_AdamAircraft_BackInBusiness_197857-1.html|title = Adam Aircraft Reported Back In Business |accessdate = 2008-07-15|last = Niles|first = Russ|authorlink = |year = 2008|month = May]

According to July 2008 statement by Sergey Generalov, CEO and owner of Industrial Investors, more than ten other companies bidded for the assets of bankrupt AAI. Russians, prior to the tender, made a deal with 50 AAI engineers, persuading them to stay with AAI, thus securing the winning bid. In addition to 10 million purchase price, Generalov expects to invest another 150 million before the project generates any return.cite web|url = http://www.kommersant.ru/doc.aspx?DocsID=916236|title = Life after death |accessdate = 2008-08-01|last = Rusiaeva|first = Polina|authorlink = |year = 2008|month = July]

The new company confirmed at AirVenture 2008 that they will proceed with certification of the A700, with an expected completion date of first quarter 2010. The company also also confirmed that they will not produce the A500 for the foreseeable future, due to the global loss of demand for piston-engined aircraft cite web|url = http://www.avweb.com/eletter/archives/avflash/1176-full.html|title = AVwebFlash Complete Issue: Volume 14, Number 31e|accessdate = 2008-08-01|last = AVweb Editorial Staff |authorlink = |year = 2008|month = August]

References

External links

* [http://www.adamaircraft.com Adam Aircraft Industries website]
* [http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2Fsearch-adv.htm&r=0&p=1&f=S&l=50&Query=an%2F%22Adam+Aircraft+Industries%22&d=ptxt Patents owned by Adam Aircraft Industries]
* [http://www.groenbros.com/pr/20060817.htm DARPA rotorcraft award]
* [http://www.adamaircraftbankruptcy.com/default.aspx Chapter 7 bankruptcy trustee]