AeroCision receives confirmation of Chapter 11 plan of liquidation

By Sarah Lizee

Olympia, Wash., March 4 – AeroCision Parent, LLC received confirmation of its amended Chapter 11 plan of liquidation on Monday, according to an order filed with the U.S. Bankruptcy Court for the District of Delaware.

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 are expected to receive a full recovery.

Holders of $105.91 million of first-lien claims are 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 are 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 will not exceed $500,000.

Holders of interests will 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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