AeroCision’s Chapter 11 plan of liquidation effective as of March 7

By Sarah Lizee

Olympia, Wash., March 8– AeroCision Parent, LLC’s Chapter 11 plan of liquidation went into effect on Thursday, according to a notice filed with the U.S. Bankruptcy Court for the District of Delaware.

The plan was confirmed on March 4.

As background, the company filed bankruptcy in July 2023 with a pre-packaged plan of reorganization in hand but later pivoted to a sale of its assets.

The company said that as part of the sale of its assets to Cadence-Southwick, Inc. for $40.2 million, it negotiated a wind-down budget with its prepetition lenders.

Under the plan, holders of priority non-tax claims and other secured claims were expected to receive a full recovery.

Holders of $105.91 million of first-lien claims were expected to receive their pro rata share of 100% of the $280,000 of proceeds withheld from the sale when the debtors receive an insurance refund, and 90% of their pro rata share of any available litigation proceeds from preserved causes of action and any available wind-down reversionary assets.

Holders of $31.84 million of general unsecured claims were expected to receive 10% of their pro rata share of any available litigation proceeds from preserved causes of action and any available wind-down reversionary assets. However, the total recovery to all holders in this class was not to exceed $500,000.

Holders of interests were to receive no recovery.

The Chester, Conn.-based company is a supplier of complex engine components and assemblies for the global aerospace industry. It filed bankruptcy on July 31, 2023 under Chapter 11 case number 23-11032.

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