DATE: November 3, 2004
TO: All Express Builders/Owners
RE: EAC Update Info
I have just returned from a weekend trip to Olympia, Washington, on a fact-finding mission. Before I left for the Northwest, I asked Roy to meet with me to discuss the EAC situation as it relates to those of us that are creditors. Roy declined the invitation and has made it quite evident that he doesn't want any one that knows anything about what is going on to speak with me. I did receive a message from his attorney through my attorney dated October 7th that reads as follows: "Express Aircraft Company is asking to have your client cease and desist publishing on the Internet regarding Express Aircraft Company. Express Aircraft has several parties interested in purchasing the assets of the business and Mr. Wolfelt's continued publication of misinformation could jeopardize the sale." All of the information that I have been able to collect has come from other builders and creditors. So unless those parties have purposely misled me, to the best of my knowledge, everything that I have written is the absolute truth. Only Roy and Nancy can confirm or refute these statements and so far, they have still refused to communicate openly with us.
Quite frankly, there are many things that make me wonder what in the world they have been up to. What follows is a partial list of the questions that I would like to have answered.
#1: I was unable to find N511EA anywhere on the airport. So I went and talked with the people in the Airport Administrative office to see if they might know where it is. I was told that EAC is still renting hanger space at the airport. But to the best of their knowledge, this space is completely filled with the other assets and some of Roy and Nancy's personal possessions. So where is N511EA "hiding"?
#2: When Roy and Nancy were "cleaning up", there was an IO-540 engine that reportedly belonged to some builder that had "abandoned" it. Roy decided to GIVE this engine to Allyn Roe. This isn't Roy's property to give away as I understand it. So even if it really had been abandoned, why not give this engine to one of the guys that had paid a deposit to EAC for a new FADEC engine. At least someone would have received something for his money. Does this transaction seem fair and reasonable to you?
#3: Last March the 19th, Nancy wrote to me: "Gary, you and your group will receive a complete Express Aircraft kit just as soon as we can gather all of the parts that are due you, which is very soon here. You and your group are not to ever step foot on EAC premises again. There will be no BA offered to you or your group". This came about as a result of my insistence on the delivery of my parts before I would provide EAC with any more of my hard-earned money. Other than my front landing gear I never received any more of the metal parts that are required to complete the project. Is this any way to treat a customer that has handed over more than $50,000 in cash and only expected a complete airplane kit in return? Is it any wonder that they were having difficulty selling any more kits? Is this someone that we should trust to do what is in the best interest of all of the creditors?
#4: Back in April while EAC continued to collect deposits for engines and avionics equipment from the builders, Roy and Nancy decided to give nice fat bonuses to all of the employees. Not that the employees had ever been paid excessively. But these bonuses reportedly cost the company (the creditors) over $20,000! That is someone's engine deposit. Does this make sense to any of you?
#5: There were somewhere between four and six engine deposits and a number of avionics deposits that were sent back to EAC after Roy and Nancy closed the doors. It has been explained to me by one of the other builders that they have been told that EAC has used those deposits to pay their bills. Does this seem fair, reasonable, equitable, the honest thing to do? I don't think so. I believe that these deposits should have been quickly returned to the people that placed the orders. If this were a real full-fledged bankruptcy, perhaps the courts would allow this. However, according to the EAC management, this is NOT yet a bankruptcy. So just where do they get the authority to pay their bills with the money entrusted to them by the builders? Does this seem fair and legal to any of you? I have been told by another builder that Roy told him that there is no money in the bank. There was at least $80,000 returned to EAC from TCM. Where did it go?
#6: If Roy and Nancy really wanted to sell the business, wouldn't it make sense to do that while the employees were still all coming to work every day and while all of the assets were still available to whoever might have interest in continuing production of the kit? That total value of the company would have certainly been greater than the sum of the parts that have been sold off if the company was still running. Does this kind of decision make anyone wonder what kind of business sense these people really have?
#7: After the decision was made to close the doors, several of us asked for permission to use the templates to trace copies of the ribs for our wings and other airfoils. We were told NO. Roy said that this little kindness would show favoritism and that we would not be allowed that little favor. Does that seem fair and reasonable to you? Me either.
#8: I know that Wicks Aircraft has a standing offer to purchase the assets of the company for what I consider to be a reasonable price. They are nervous that some or all of the creditors might come to place demands on them for the past shortcomings of EAC and they do not want to get into that can of worms. I cannot blame them. So I have offered to front the money for ninety days (to be put in an escrow account) while all of the creditors are contacted and signed to a no law suit/no bankruptcy agreement. After everyone has signed on and the ninety days has run its course, the funds can be distributed to the creditors and the assets would be sent on to Wicks to allow the resumption of business. Does it sound to any of you like I am wanting to stand in the way of a deal that could put all of us back in the business of completing our projects? Do any of you think that the six weeks that have elapsed since the announcement of the closing isn't really enough time to sell the company to someone with the money? I even dismissed my law suit to take some of the pressure off of EAC. What are they waiting on?
#9: If there really is someone other than Wicks out there with a better cash offer, why not accept it and then allow the creditors oversight committee that I have suggested to "watch over their shoulders" just to make sure that we are all going to be treated fairly. What would that hurt?
#10: If we all just sit around waiting on Roy and Nancy to do whatever they decide is in our best interest, will it really happen that way? Call me a cynic or whatever you want. But if they will not voluntarily disclose to us what the facts really are, I would rather trust the courts to require them to testify to these facts under oath than to hope for the best.
Here is what I propose we do. If we put the company into an involuntary bankruptcy and let the court appointed trustee handle the deal, we won't ever see much if any of our money again. However, if we put the company into bankruptcy and then immediately vote to reappoint a new trustee (one or several of us that would work for free) to sort things out we would preserve the remainder of the assets for the benefit of all of us. This is completely allowable by the bankruptcy court. I will volunteer to work for free for three months. But if the group wants to elect someone else, that is just fine and dandy with me too. Please send me a personal e-mail to let me know if you are in favor or not in favor of proceeding as I have suggested above. This is an informal poll. But I would prefer that the majority of the group agree as to how to proceed. If the majority of the group wants me to shut up and go away, I will do just that. But keep in mind that the bankruptcy proceeding will reverse all of the transactions that have taken place in the past ninety days. That means that whomever was paid with the engine/avionics deposits will be required to return the money to the EAC bankruptcy trustee. That means that Allyn Roe will have to return the engine that he "owns" now. That means that if N511EA is really missing, that it will have to be returned. That means that the forklift, the cargo trailer, the metal shear and brake that were all sold off will all have to be returned to the trustee. Please let me hear from you soon. Thanks for taking the time to read this. GHW