For historical purposes, this page maintains a collection of all available information related to Columbia Aircraft Manufacturing bankruptcy proceedings from 2007. This covers a number of legal documents, together with human readable summaries of what went on.

Summary info

  • Company: Columbia Aircraft Manufacturing
  • Case #: 07-33850-elp11
  • Court: United States Bankruptcy Court - District of Oregon
  • Petition: chapter 11 under Title 11 of US Code
  • Date Filed: Sep 24, 2007
  • Date Settled: Dec 4th, 2007 (Cessna took ownership on this date)
  • Date Final Disclosure: Apr 14th, 2008 (final list of who gets what out of the sale to Cessna)


The detailed reorganization settlement can be found here. 102 pages of legalese and not for the faint hearted. Here is the section relevant to owners group:

  • 6. Class 6 (Aircraft Warranty Holders). Class 6 is impaired. Each holder of an Allowed Class 6 Claim will be treated as follows:
    • (a) pursuant to Section 2.3(d) of the PSA all liability for the amount of Warranty Claims arising from aircraft sold by Debtor prior to December 4, 2007 and not paid by Debtor during the Bankruptcy Case has been assumed by Cessna subject to the limitations in subparagraph (c) below; and
    • (b) pursuant to Section 2.3(d) of the PSA, and paragraph 6 of the Sale Order, Cessna has sent to all known owners of Debtor's aircraft who were covered by a warranty from Debtor as of December 4, 2007 ("Unexpired Warranty"), a standard Certificate of Warranty from Cessna good for the remaining term of the Unexpired Warranty from Debtor. The new Cessna Warranty replaced the Unexpired Warranty in its entirety, unless an Unexpired Warranty held by an owner provided greater rights to such owner, in which case the existing Unexpired Warranty continues to apply and shall be honored by Cessna. Each aircraft owner shall have the right to enforce the provisions of Section 2.3(b) and (d) of the PSA;
    • (c) notwithstanding the foregoing, Cessna did not assume and has no liability to pay any and all claims for rescission of purchase agreements for aircraft purchased from Debtor prior to December 4, 2007 including, but not limited to, claims against Debtor for the return or repurchase of aircraft previously sold by Debtor prior to December 4, 2007; and
    • (d) to the extent a Class 6 Claim is not covered by subsection (a) and (b), the holder of an Allowed Class 6 Claim shall receive, from time to time, Pro Rata distributions from the Liquidating Trust of Available Cash on par with the Class 9 Claimants in full satisfaction of their Class 6 Claims.
  • 7. Class 7 (E-VADE De-Icing System). Class 7 is impaired. Each holder of a Class 7 Claim shall have a claim against Cessna for any liability arising out of or related to the sales or installation of an E-VADE de-icing system on aircraft sold by Debtor prior to December 4, 2007 and shall have no further Claim against Debtor. Each Class 7 Claimant shall have the right to enforce the provision of Section 2.3(c) of the PSA.

Human-readable summary

A human-readable summary of the bankruptcy outcome as per Steven Peretz (original post here ):


It has been a quiet few months since the flurry of activity in late 2007.

Nonetheless, the CAM bankruptcy is about to reach another milestone – confirmation of the Plan of Reorganization -- now scheduled for May 28, 2008, and I wanted to update you on the status of the case, even though Columbia aircraft owners no longer have a dog in this fight except to the extent some of the owners may have unsecured claims not otherwise assumed by Cessna.

Settlement with Garmin. CAM and Garmin have reached a settlement (subject to court approval) resolving Garmin's motion to convert the case into a Chapter 7 liquidation. Under the settlement, Garmin will have an allowed secured claim in accounts receivable and certain aircraft of $3 million ($1 million from the debtor and $2 million from Cessna). Garmin will receive 15% of the net recovery on the debtor's insurance coverage litigation. Garmin will have a general unsecured claim of approximately $20 million until the insurance coverage litigation is resolved and the 15% of the net recovery is certain. Garmin will withdraw its motion to convert the case into a Chapter 7 (thereby allowing the case to continue as a Chapter 11 reorganization) and will no longer participate in the bankruptcy case once the settlement is approved. Overall, Garmin took a big hit in this case.

The Reorganization Plan. All Columbia aircraft owners should have by now received a Ballot for voting on the pending Second Amended Plan of Reorganization proposed by CAM. Since the secured and unsecured creditors have approved the Plan, a favorable vote is largely a formality at this point.

Under the Second Amended Plan of Reorganization, Class 6 and Class 7 creditor treatment applies to those aircraft owners with warranty claims and de-icing claims, respectively. These claims have been assumed by Cessna, as required by the Purchase and Sale Agreement.

Class 8 covers those creditors with small unsecured claims of $2,500 or less (and those who elect to be treated as such a claimant even if their claim is larger). CAM proposes to pay Class 8 creditors 10% of their claims in cash on or before 60 days after the Effective Date. Aircraft owners with smaller unsecured claims may wish to elect Class 8 treatment but must do so on their Ballot.

Class 9 covers general unsecured claims (estimated at $75 million). CAM proposes to pay Class 9 creditors 5% of their claim, plus their prorate share of any additional amounts the liquidating trustee may recover from the insurance litigation, claims against Kelly with related to the E-VADE de-icing system (estimated at $1 million) and preference claims (estimated at $1 million to $2 million). The distributions will be made by the Liquidating Trustee (Conrad Myers). There are no set dates for distributions to Class 9 creditors, but CAM estimates the first distribution will be made within 90 days of the Effective Date followed by another distribution approximately 6 months later, with annual distributions thereafter until all assets are distributed.

No Product Liability. There is no carve-out or set aside for any product liability claims and CAM has no insurance for coverage of any such claims. CAM does not think there are any post-petition product liability claims for administrative expense purposes. Our Portland counsel asked that some funds from the Plan be allocated to cover such claims, but received no support since such funding would only take money away from other creditors.

Voting and Confirmation Hearing. The confirmation hearing for the plan is scheduled for May 28, 2008 at 9:30 a.m. The Effective Date of the plan, assuming it is confirmed, is 11 days after the confirmation order is entered. Ballots have already been sent and must be cast and received by May 21st (4:00 p.m. Pacific Time). They can be mailed or faxed to Tim Conway at Tonkon Torp. If the CAM objects to a claim and the claim is not allowed by the court for voting purposes, then that claimant cannot vote. Our Portland counsel reports that no objections have been filed by the CAM to any owner claims.

Epilog. Absent unexpected developments, this will be the last Bankruptcy Update I will be filing. The Columbia aircraft owners, as a group, came out far and away with the best treatment of all of the unsecured groups before the court. It has been my privilege to serve with the other members of the Columbia Aircraft Owners Ad Hoc Committee and the other members of the Board on this landmark project. The Club Columbia legal effort marked an unprecedented level of aircraft owner participation in a bankruptcy case and I thank all aircraft owners and other supporters who contributed to our legal fund. I wish our group continued success under the Cessna banner.


Steven Peretz, N915GM
Legal Liaison, Columbia Aircraft Owners Ad Hoc Committee
Member, Board of Directors