DATE: Sept. 28, 2004

TO: All Express Builders/Owners

RE: Today's update

I have not been sleeping very well for the last week or so while my brain has been spinning about as fast as an electric gyro. I am gaining more and more information and insight into the EAC mess every day. Since the law suit that I had filed earlier this year in an attempt to cause EAC to deliver the remainder of my parts is certain to only put more money in the hands of the lawyers and leave less for distribution to all of the remaining creditors, yesterday I asked my attorney to dismiss the suit. A forced bankruptcy is still a possibility from any group of three creditors and I believe that the only way to keep this from becoming necessary and likely is if the EAC management will come clean with all of us and let everyone know what the numbers are and exactly what their plan is.

I spoke with my brother-in-law attorney (a local bankruptcy guy) over the weekend and specifically asked him what a "winding down" was. He said that he had never heard the term in a legal sense. He suggested that it might be a term that the state courts in WA use that is similar to what we call in Indiana an "Assignment for the benefit of creditors". This process is one where the creditors agree to not file a bankruptcy but create an oversight committee to observe, and approve the actions of the company that is "winding down". This keeps the professionals (attorney and accountant) from sucking up all of the available assets before they distribute the last ten dollars to the creditors. This is why if any of you have ever been a party to a bankruptcy action, you get much less of what is owed you by the time the process is over with.

The good news is that the folks at Wicks Aircraft in St. Louis have a legitimate offer up for consideration with EAC. However, they are nervous about proceeding because of the possibility of an impending bankruptcy. They don't want to end up with a bunch of claims from those of us that are already out money for our kits, engines, and avionics. And because no one except EAC and their attorney know what the numbers are, there is no real way to figure out what to expect. In my opinion, Wicks would be a good place for this kit company to land. They are at the center of the building universe, have the financial resources, experience and the proper motivations (for profit!) to keep the Express machine flying.

The bad news is that those of that are still short parts are probably going to have to purchase them a second time. The Wicks guys have suggested that they sell those parts to us at their cost plus a ten percent margin for the trouble of handling the stuff. That is probably the best that we can hope for. But at least the Express will survive this way. My guess is that there is so much owed to us builders by EAC that there can never be enough money out of the "purchase" of the company to equitably compensate all of us.

Here is what I think might work for everyone if Roy and Nancy will play ball. First of all if they will agree to the oversight committee, we find two or three Express owners/builders that live in the great Northwest to serve in that capacity for travel expenses only. Much of this can be done by FAX and e-mail to limit expenses. Number two, everyone agrees to NOT file the bankruptcy against EAC. Let Wicks execute their purchase agreement with EAC and put the funds into an escrow account for ninety days just to make sure that no one files the bankruptcy action. During this period, all creditors are advised of what the plan is and what the numbers are. After the ninety day (legal limit to the bankruptcy action) the funds come out of the escrow account to EAC for distribution and then Wicks can move ALL of the assets to St. Louis to start production again.

It might also be possible during this ninety day period for EAC to "rent" the molds and jigs to our Builder-Owner Association (to stay in WA) so that we could hire some of the former EAC employees to make the rest of the composite parts that we need. We would have to pay for the materials that we use, for the rent of the building in which to operate, the utilities, and of course a per piece price (wages) for whatever comes out of production. I personally would like to see these guys go to work on my wings during this period. I have made contact with the people that own the BA building and they are willing to rent to "us". With the approval of the oversight committee, the rent paid on the molds and jigs could be used to start paying the back wages to the EAC employees. These guys have never been paid big wages for what they do. And some of them are suffering right now as they cannot get paid by EAC and are taking minimum wage jobs to just keep food on the table. If these people are treated properly and paid fairly, they could also be a great asset to Wicks as consultants (or maybe even employees if they could relocate).

I am going to transmit a copy of this post directly to Roy and hope that he will speak with me later in the day to see if he has any willingness to participate as outlined above. Please let me know your thoughts on the matter. I want to start getting some sleep again. GHW