$ACY Files Petition for Chapter 11 Reorganization

AMEX:ACY   AeroCentury Corp
AeroCentury Corp . Files Petition for Chapter 11 Reorganization

The Company has determined that the Chapter 11 process is the most effective next step to resolve the Company’s outstanding indebtedness and to progress toward the Company’s goal of continuing in the regional aircraft business in order to preserve enterprise value for the Company’s stakeholders.

To ensure its ability to continue operating in the ordinary course of business, the Company has filed with the Bankruptcy Court motions seeking a variety of “first day” relief, including authority to continue utilizing and maintaining its existing cash management system and authority to pay its employees in the ordinary course of business. Business operations across the AeroCentury platform are continuing without interruption.

The Company has proposed in one of its Chapter 11 motions an auction sale (“Auction Sale”) for its assets in order to fund repayment of its indebtedness to its sole secured lender, Drake Asset Management Jersey Limited (“Drake”). The Company has entered into a stalking horse agreement with Drake to acquire the aircraft collateral securing the Drake indebtedness, subject to higher and better bids. In the event Drake is the successful bidder, the closing of the purchase will resolve all of the Company’s outstanding indebtedness to Drake.

“We hope that following final resolution of the Drake indebtedness through the Chapter 11 sale process, we will get speedy approval for a reorganization plan and will be able to promptly emerge from Chapter 11,”