Emivest Aerospace files bankruptcy
CHARLESTON, W.Va. -- The value of the state's $2 million investment in an aircraft maker is unknown, now that the company has filed bankruptcy.
The West Virginia Jobs Investment Trust - the state's venture capital fund - invested $2 million in the Sino Swearingen Aircraft Co. in the early 1990s, when the Taiwanese government controlled the company.
In 2008 the Emirates Investment and Development of Dubai, the United Arab Emirates, acquired an 80 percent interest in the company. Sino Swearingen's name was changed to Emivest Aerospace Corp.
The private aircraft business went into a tailspin in 2008 when the nation's economy and the economies of many other nations went into a recession. The aircraft manufacturer had hundreds of orders for its jet, but could not find the financing it needed to ramp up production.
Last week Emivest announced it has filed Chapter 11 bankruptcy, which means it intends to restructure. The company said it will operate normally during the bankruptcy.
Andy Zulauf, executive director of the Jobs Investment Trust, said the trust evaluates its investments annually. For the past several years the trust has valued its investment in the aircraft maker as being worth $3.1 million, he said.
It is too early to determine what impact, if any, the bankruptcy filing might have on the value of the trust's investment, Zulauf said.
"We have our legal counsel reviewing the documents and expect to get some advice from them over the next week or so."
Investors are usually wiped out when a company files bankruptcy and liquidates. But when a company files to reorganize, investors sometimes end up owning a piece of the restructured company.
"We're such a minority shareholder in the company," Zulauf noted. "Because of our position we don't have influence in decisions that the board of directors and senior management make. The fact it is a Chapter 11 filing gives us more comfort that the company can be successfully restructured."
Sino Swearingen - now Emivest - developed a new business jet, the SJ30. The company is based in San Antonio, Texas, where the aircraft is assembled. The fuselage, wings and tail are manufactured at Martinsburg.
The Federal Aviation Administration, the industry's regulator, certified the jet in 2005. The company had 140 employees at Martinsburg that year. During a 2005 ceremony at Yeager Airport, company executives promised to employ 400 people at Martinsburg within five years.
Emivest Aerospace spokesman Mark Fairchild said Friday that he believes the company now has one employee in Martinsburg.
"We continue to support our customer aircraft in the fleet," Fairchild said.
The SJ30, which has seating for one pilot and six passengers, has a retail price of $7.5 million.
The company has delivered four aircraft to date. Late last year the company delivered one to actor and pilot Morgan Freeman. Fairchild said Freeman has flown the plane all over the globe with several trips to Europe and South Africa.
Sen. Jay Rockefeller, D-W.Va., worked for 14 years to get Sino Swearingen up and running in Martinsburg. He made more than a dozen trips to Taiwan to meet with investors and government leaders about the manufacturing project.
Rockefeller said, "I am very concerned about the news of restructuring at Emivest. I will be monitoring this situation closely. I worked hard to bring Sino Swearingen and now Emivest to West Virginia and I hope that they are able to restructure in a way that keeps the company in the Mountain State."
Contact writer George Hohmann at email@example.com or 304-348-4836.