Lear Fan Ltd. Files For Liquidation
DENVER (AP) _ Lear Fan Ltd. filed for Chapter 7 liquidation proceedings in U.S. Bankruptcy Court on Thursday, listing assets of $7 million and liabilities of $475 million.
The company, which has its corporate headquarters in Denver and its research and development, and manufacturing facilities in Reno, Nev., derived its name from the experimental Lear Fan 2100 aircraft.
The executive aircraft features a rear propeller and a plastic-like fuselage. The craft never received airworthiness approval by the Federal Aviation Administration.
The British government has invested 57 million pounds, about $71.8 million, in the project, which it hoped would provide 2,800 jobs at two factories in Northern Ireland.
Britain appointed the London accounting firm of Cork, Gully and Co. as receiver after the company ended operations in Great Britain last month.
That firm also served as receiver for Northern Ireland’s De Lorean sports car project, which failed in 1982 after the British government had invested 77 million pounds, which was then $140 million.
The Lear Fan 2100 was the idea of aviation pioneer William Lear, who developed the Learjet, automobile radio, and eight track stereo.
Before he died in 1978, Lear sold the rights to the Learjet to Gates Learjet in 1967.
His widow, Moya Lear, has said her husband’s last words were a plea to finish the Lear Fan, designed to be much lighter than conventional aircraft because of its shell made of graphite-epoxy resin material, and smoother aerodynamically because of its rear propeller.
But problems continued in development. A group formed by Oppenheimer & Co. invested $30 million in Lear Fan in 1982. A year later, a group of Saudi investors formed Zoysia Corp. and invested another $88 million.
The filing listed 498 creditors covering 17 pages.
Among the creditors were the Department of Economic Development for Northern Ireland in Belfast; LearAvia Corp., of Reno, Nev.; the Ulster Investment Bank Ltd. of Belfast, Ireland; and Zoysia Corp., of Denver.
The filing also said the firm owes taxes to the Internal Revenue Service, Nevada’s Employment Security Division, the Colorado Department of Labor, the Colorado Department of Revenue, and the California Employment Development Department.
Late last month, Lear Fan’s board secretary said that if the firm didn’t raise $500,000 for operating funds, the board was authorized to file for the Chapter 7 bankruptcy.
Bob Burch, chairman of the board, authorized the hiring of Denver lawyer Jack L. Smith of the law firm of Holland & Hart to handle the bankruptcy.
Smith said under Chapter 7, a trustee takes over control of the company’s assets and attempts to liquidate them and distribute the proceeds among the creditors.
The company closed its operations last week.