Lasar Aviation Mooney Assurance Program - Really?

[Tom F]

3 hours ago, Mark89114 said:

They must have hired an Ivy-League MBA consultant to come up with this plan.  (that is not a compliment)

 

This is helpful.

[GeeBee]

1 minute ago, Tom F said:

I’m not versed in bankruptcy law, but if it’s that easy somebody may have an opportunity to own Mooney through bankruptcy.  Good luck with the FAA, I’m fairly certain the money they’d save in CH7 would be eclipsed in what you’re going to need to get FAA certifications back.  But once again I’ve never been through bankruptcy, but I’m sure there may be a bankruptcy attorney in this group who might shed some light on it. 

I was part of a group that was attempting to buy Piper in the 1980s out of Chapter 11. I've also worked for an airline that declared Chapter 11. Bankruptcy need not be feared. In fact it is sometimes a preferable course of action. I believe the present problems at Mooney stem from an unwillingness to declare bankruptcy, clear the books and the decks. To be sure like any business decision it is not without risks. In Chapter 7 liquidation the judge could decide to sell it off in pieces rather than whole, doing whatever is in the best interest of the creditors. In Chapter 11 somebody can come in, make a deal with your creditors and own you for your debt. My guess is Mooney can be purchased out of bankruptcy for far less than the present ownerships is willing to sell it for. Likely as much as 80% less.

That all said everyone involved in equity in Mooney right now should be wiped out because they never owned the company with intentions to develop the brand or to support the fleet. They bought it for other purposes, those plans have failed and they need to go away and not be awarded. That's capitalism. Only bankruptcy will do that.

Piper (twice) in bankruptcy did not loose their production or type certificates. Neither did Beechcraft. Delta, United, American all kept operating just fine. Does it bring greater scrutiny of operations? Of course, but nothing that cannot be managed. 

[1980Mooney]

5 minutes ago, Tom F said:

They’re under contract to purchase Mooney in its entirety.

I don't doubt you but I wondered above if there is any statement or link regarding this.  Was this announced at the same time as the "Assurance Program" was rolled out at MooneyMax? 

LASAR keeps stressing "Transparency"......

[GeeBee]

37 minutes ago, Tom F said:

They’re under contract to purchase Mooney in its entirety.

If they are paying more than for the old ownership to move their desks out and paint over their parking spots, it is too much.

[Paul Thomas]

I guess I'll do the right thing and become a gold member; I'll just give up my hangar to make up the cost difference 

I wonder how many people will sign up... this will make me less likely to purchase anything from LASAR when I don't have to, not that they've replied to my emails when I've tried to order. Sigh. Maybe they could have done basic professionalism for $100 a month.

[Yetti]

the other thing that is weird is the only two times I needed parts, I called an MSC.   They looked up the part and dropped shipped it to me.    This first deal of parts distribution looks like a cutting the MSC out of the picture.   Now going direct to the owners does what with the MSCs?   

[IvanP]

39 minutes ago, 1980Mooney said:

I don't doubt you but I wondered above if there is any statement or link regarding this.  Was this announced at the same time as the "Assurance Program" was rolled out at MooneyMax? 

LASAR keeps stressing "Transparency"......

Call me jaded, but any time a company in financial distress starts touting "corporate transparency" my bulls#@% meter pegs to full-scale deflection. What we saw so far was about as transparent as a black hole. 

[Paul Thomas]

I saw a video that mentioned subscription from the September Tampa event. This is last minute thought for MooneyMax.

[Shadrach]

11 hours ago, Schllc said:

One would hope this is the case, but what a bizarre way to market this idea…

There is literally no explanation of what you actually get for your contribution, shouldn’t that be clear before asking for 25k?

My comment was sort of tongue in cheek. I hope I’m wrong, but what I see happening is the following:

• The parts section of the website will remain off-line to the general public.
• Parts distribution will be tightly controlled.
• Factory parts are going to be outrageously priced (think Bonanza parts from Textron).
• The Mooney Assurance Program will offer members direct to consumer purchasing through the parts portal with parts being discounted from egregious to merely outrageous.

[hazek]

7 hours ago, Tom F said:

The alternative is Mooney is gone.

By the looks of things, Mooney IS gone. But that's not the alternative.

4 hours ago, GeeBee said:

Better to let the thing liquidate in Chapter 7 and Lasar form a new company to buy the liquidation.

This is the alternative.

3 hours ago, KSMooniac said:

could have kept the factory humming and the lights on

Yes they could. But I suspect this whole thing is a people problem. People who think too highly of themselves in terms of their capabilities and what their actual capabilities are worth. The value as some pointed out is the design approvals and certificates. But I bet the employees think that the real value is in them and are being overpaid for what they contribute. And then there are the owners. One that likely wanted to do something but got stuck with useless employees and one that just thought they could put lipstick on this pig and make a quick buck.

A motivated clever leadership and motivated employees could indeed make something out of this. But not the current entrenched lot. They've proven as much.

2 hours ago, 1980Mooney said:

That is exactly what Belanca, Commander, Aerostar, FletchAir (Tiger/Gumman) and others have done.

Exactly. The entire crew, from the corner office to the cubicles, has to hit the exits; they're the root of the rot. Once the assets are auctioned off at fair market value, a fresh start on stable ground might just emerge from the ashes.

[GeeBee]

5 minutes ago, hazek said:

But I bet the employees think that the real value is in them and are being overpaid for what they contribute. And then there are the owners. One that likely wanted to do something but got stuck with useless employees and one that just thought they could put lipstick on this pig and make a quick buck.

I think that is excessively harsh and un-necessary. The production and engineering employees of Mooney have conducted themselves in exemplary fashion under very trying circumstances not of their making. I am sure they are ready willing an able to step up when properly led by good management. I've seen this movie before and when properly led, employees respond faithfully and enthusiastically. 

[hazek]

1 minute ago, GeeBee said:

The production and engineering employees of Mooney have conducted themselves in exemplary fashion under very trying circumstances not of their making. I am sure they are ready willing an able to step up when properly led by good management.

Submit your evidence, I'm all ears.

[Tom F]

2 hours ago, GeeBee said:

I was part of a group that was attempting to buy Piper in the 1980s out of Chapter 11. I've also worked for an airline that declared Chapter 11. Bankruptcy need not be feared. In fact it is sometimes a preferable course of action. I believe the present problems at Mooney stem from an unwillingness to declare bankruptcy, clear the books and the decks. To be sure like any business decision it is not without risks. In Chapter 7 liquidation the judge could decide to sell it off in pieces rather than whole, doing whatever is in the best interest of the creditors. In Chapter 11 somebody can come in, make a deal with your creditors and own you for your debt. My guess is Mooney can be purchased out of bankruptcy for far less than the present ownerships is willing to sell it for. Likely as much as 80% less.

That all said everyone involved in equity in Mooney right now should be wiped out because they never owned the company with intentions to develop the brand or to support the fleet. They bought it for other purposes, those plans have failed and they need to go away and not be awarded. That's capitalism. Only bankruptcy will do that.

Piper (twice) in bankruptcy did not loose their production or type certificates. Neither did Beechcraft. Delta, United, American all kept operating just fine. Does it bring greater scrutiny of operations? Of course, but nothing that cannot be managed. 

I would suspect the current owners would need to file chapter 7. Your assumption is they are willing to. Neither of us know what current ownership wants to do. I have no knowledge of debt. I believe we have 2 owners, neither US based, who were ready to put the key in the door and call it a day. What happens then? Lasar steps up to cover expenses with a contract to purchase.  If the factory closes and rots away what are our options.

[GeeBee]

16 minutes ago, hazek said:

Submit your evidence, I'm all ears.

One, when they shut down, then started back up a few months later just about everyone who was called, returned. Sign of dedication to the company.

Two, when I was able to get through with a need, I was supplied with an above and beyond answer, in one case including a photo of my airplane on the assembly line int 2004.

Three, Last time I was at Kerrville, I did not see any expensive or late model personal vehicles in the parking lot. (It's a tell for how well your employees are doing)

Four, I was employed by an airline that had a sterling reputation until bad management took it over and we suffered a 10 year decline to the point of bankruptcy. I and fellow employees kept our heads up but if you don't have the tools, you can't do your job. The new management came in and said (this is a direct quote), "We will no longer balance our books on the backs of our employees" We went from worst to first, the most financially successful airline in the history of mankind and with the results announced last Wednesday are pulling away from every. competitor. Because management completely changed the business paradigm of not trying to sell the cheapest seats but getting the most money for each seat sold by creating value in the product.

Finally, and I am sure because of your location you are not aware of this, but the Kerrville area suffered flash floods Friday July 4 of this year. 107 deaths including 37 children swept away, some bodies still have not been found. I am sure not a person in the factory was untouched in some way personally being a tight community, but a part I ordered July 1 was shipped shipped out on Monday July 7. Dedication.

[GeeBee]

7 minutes ago, Tom F said:

I would suspect the current owners would need to file chapter 7. Your assumption is they are willing to. Neither of us know what current ownership wants to do. I have no knowledge of debt. I believe we have 2 owners, neither US based, who were ready to put the key in the door and call it a day. What happens then? Lasar steps up to cover expenses with a contract to purchase.  If the factory closes and rots away what are our options.

Any creditor can sue to force bankruptcy. 

[hazek]

8 minutes ago, GeeBee said:

One, when they shut down

Ah I see now. You don't consider management employees. They are. And while I have no doubt that there are some good lower level employees just trying to make a living there that fulfill their obligations to the company and try to do so to the best of their abilities, this isn't a charity, and we're not handing out participation trophies. Bad management means bad lower level employees. I see it all the time. People like people that are like themselves. And bad management typically hires people of the same rotten profile. They don't want to but yet the manage. And while some are probably worth keeping, this needs to go through a process of determining who is and who isn't worth keeping around.

I'm not trying to shit on individuals here. I have no clue who works there, what they do, how much they're paid, what their qualifications are and what they even do if the factory isn't doing anything. I'm just being rational and am looking at the situation. This situation didn't just happen. There are objective reasons for it. I'm sure people involved will have plenty of excuses but at the end of the day they are failing. And that's the bottom line.

There's a reason why Elon Musk has several successful companies and other people can't run even one. Like people said, there is not going to be a solution here that keeps the status quo, in today's world no one is so stupid or naive anymore to throw away that much money.

 

[Schllc]

6 hours ago, GeeBee said:

Without a debt or equity position, I don't see the value here. I'm not prepared to give money to Lasar to bail out the old Mooney owners who failed, newsletters and parts priority not withstanding. Better to let the thing liquidate in Chapter 7 and Lasar form a new company to buy the liquidation. It could be purchased cheaper than bailing out Jonny Pollack, his minions and the Chinese. The reality is, even if all the long body owners bought in, I don't see even 1 million being raised and to give it to the previous owners? No. They should all lose their equity, be removed entirely and a new owner use this capital to start anew. Give me that scenario and I will invest. I will say this right now. Do this plan and I will stroke a check for 10K tomorrow for shares. I will not pay a cent to buy out the old shareholders. This does not have to be complicated.

This is absolutely how it will end, how stubborn the old owners, and how patient Lasar are will determine the when. 
What happens to the TC and the manufacturing/production certificate if a complete bankruptcy happens?

Paying for access to order parts doesn’t lend itself well to “levels”. 
for the life of me I can’t understand the benefit or reason for them to propose something so vague and undefined. 

I don’t feel overly concerned about keeping my plane flying for the rest of my lifetime. 
if the commander fleet can limp along, mooney’s certainly will be able to, all that is left to determine is the shape that takes. 
 

[GeeBee]

12 minutes ago, hazek said:

I'm not trying to shit on individuals here. I have no clue who works there, what they do, how much they're paid, what their qualifications are and what they even do if the factory isn't doing anything. I'm just being rational and am looking at the situation.

Then why are you dissing them?

[NickG]

1 hour ago, hazek said:

Exactly. The entire crew, from the corner office to the cubicles, has to hit the exits; they're the root of the rot. 

Wow. A real "people" person. Charming.

[hazek]

39 minutes ago, GeeBee said:

Then why are you dissing them?

Why does a student get an F on a test? And is that considered dissing him?

The factory stopped producing planes and can’t even produce parts. Does it get any worse than that? Is this not an F?

 

[1980Mooney]

1 hour ago, Tom F said:

I would suspect the current owners would need to file chapter 7. ... Neither of us know what current ownership wants to do. .. I believe we have 2 owners, neither US based, who were ready to put the key in the door and call it a day. What happens then? Lasar steps up to cover expenses with a contract to purchase.  If the factory closes and rots away what are our options.

Interesting comment.  So you think US Financial, LLC (Wyoming), the "so called" 80% Owner is just a cover for foreign owners? For years, foreign entities and cybercriminals have used Wyoming LLC's to hide their identity.

 

[IvanP]

57 minutes ago, hazek said:

Bad management means bad lower level employees. I see it all the time. 

I'm not trying to shit on individuals here. I have no clue who works there, what they do, how much they're paid, what their qualifications are and what they even do if the factory isn't doing anything.

 

I would  respectfully disagree with some of your points.

1. Some highly qualified employees, like Frank Crawford, have been with Mooney through the various management and ownership structures and their contribution to the factory and to Mooney fleet is simply invaluable. They are probably worth their weight in gold, if not more.  

2. Bad management does not automatically translate into bad employees. Managers come and go, but loyal employees who are passionate about what they do tend to weather the storms.

I do agree with your statement that you have no clue about who works for Mooney and what they do. Your remarks appear to be rather offensive to those who have been part of Mooney for many decades and who kept our planes flying, despite some of the poor management choices made by the owners and managers of the company.  

[1980Mooney]

4 hours ago, Rick Junkin said:

Does LASAR have a presence here on MS?

EDIT: I answered my own question (duh) @LASAR 

Here is a better answer.  LASAR doesn't give a crap about MooneySpace. or its members.  The last time they even visited or looked at a MS page was 3 1/2 years ago.  The last time (actually first and last) that they posted anything or answered any question on MS was eight (8) years ago in 2017 during the month that they joined.  At the time they just used it for a few marketing posts to say they were moving.  I would be willing to bet the only reason that they show up visiting MS after 2017 is because someone with fat fingers accidentally clicked on the MooneySpace site.......

[Schllc]

10 minutes ago, 1980Mooney said:

Here is a better answer.  LASAR doesn't give a crap about MooneySpace.

I’d guess something like mooneyspace is a double edge sword for Lasar. 
I mean the forum gets spicy at times, doesn’t always stay on topic, and the anonymity usually does not enhance the discourse…. 
But, we are a relatively large sample size of Mooney ownership, and I would think it represents a more accurate than not profile of the entire Mooney owner group.  
Im not saying that business decisions should be predicated on our opinions,  but I do believe it should be a point of. consideration. 
Not necessarily regarding how they run their company, but what their core market is thinking does matter…

[WilliamR]

Couple thoughts. First, anyone who viewed Mooney's financials should NOT comment. They are in possession of MNPI and can be sued for tortious interference especially now that Privates are being solicited. 

Second, this LASAR plan fails within a year or maybe never even gets off the ground (see what I did there?). Based on the following. 

Third, LASAR's video showed lack of sophistication and I don't mean just the terrible production quality. The message was neither crisp nor enlightening. I get we are only talking single digit millions here, but as a 30 year Investment Banker who's seen a lot of presentations over the lifecycle of a company, that video was outright a waste of time.  This latest message takes the lack of sophistication further (announced the need for funding AFTER you announce the deal). That's way backwards but in line with how they described the take over of LASAR; no real plan and no foresight to the issues.

Fourth, it doesn't matter whether you consider yourself a lender or equity holder by paying the upfront subscription or entering into the Privates. The result is the same, you're equity given the lack of collateral based on some of the materials from LASAR and the 1st stage pitch distributed here several years ago. I bet NOLV is at best $500,000.

Fifth, any creditor can involuntarily declare Mooney bankrupt should the amount of debt meet the limit (limit routinely increases but is surprisingly small). However, I would bet there's no debt here. Mooney couldn't even get terms on payables (a low bar) according to Mooney's hobbyist CEO. Also, unlikely any equity investor converted to debt (its usually the other way around). Lack of debt actually makes a buyout here easier. The change could just be a paperwork exercise with as little as $1 being exchanged. Ask Bombardier how that would work. They did it in 2017. 

Last, this train wreck was predictable years ago when the latest ownership group came in. A lawyer as a CEO rarely works (Frank Blake at HD being the rare exception). A lawyer who has no operating experience in any manufacturing much less aerospace (the issues here are not specific to the aerospace industry), funded by friends and family money, and wants to do a turnaround as a hobby? Well, that's laughable. Hey, I get it though, sounds cool at parties to say I am the CEO of an airplane manufacturer.

I've had to make tough credit decisions. I've funded into companies that eventually went BK. I've negotiated forbearance agreements. An investment decision on LASAR's "scheme" isn't a close decision. It's just terrible.

Btw, my name is William P. Rutkowski in Atlanta. Anyone is welcome to look up my credentials in LinkedIn. NOTE, THIS IN NO WAY SHOULD BE CONSIDERED INVESTMENT ADVICE. PLEASE CONSULT YOUR FINACIAL ADVISOR BEFORE INVESTING.