BigBadBob

BigBadBob

Member
I see on the BMC site there is an "Adversary Case" listed: Ivanov v. Van's Aircraft, Inc.

Is there a lawyer in the house who can explain Adversary Cases, what they are, how they impact the Chapter 11 filing, what to expect from them, where to find more information about specific Adversary Cases, etc.?
 
An adversary proceeding in bankruptcy is a case involving a third party that is associated with the bankruptcy. Sometimes people sue the debtor (e.g., to argue that their debt should be non-dischargeable, as happened here), and sometimes the debtor or trustee sues third parties (e.g., to rescind payments made to that party so there will be more money for creditors). I have attached the complaint if you want to want to read it. I'm not sure why it's not on the BMC website.
 

Attachments

  • Ivanov v. Van's Aircraft.pdf
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I believe in order to be valid, the complaint must include an accusation of “fraud” or “misrepresentation”. This is the basis of having a debt to “not be relieved” through the act of bankruptcy.

(I am not a lawyer, but I’ve been sued a few times ;) )
 
JonJay said:
I believe in order to be valid, the complaint must include an accusation of “fraud” or “misrepresentation”. This is the basis of having a debt to “not be relieved” through the act of bankruptcy.
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That's correct. There's a much higher bar for fraud claims than other types of claims. You're required to allege specific facts that, if true, would show that the defendant knowingly made material misrepresentations of fact to cause the plaintiff act to their detriment. It's not enough to make conclusory statements that someone made misrepresentations, you have to give details that show knowledge and intent.
 
What is the ordering of these? Does the court dispose of adversary proceedings before dealing with the bankruptcy?
 
The adversary proceedings have to be resolved (i.e., dismissed, settled, or brought to judgment) before the bankruptcy case can be concluded.
 
bmellis11 said:
The adversary proceedings have to be resolved (i.e., dismissed, settled, or brought to judgment) before the bankruptcy case can be concluded.
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This type of suit may require additional discovery. That could be very time consuming and expensive. It could also pull into play all kinds of different liabilities that were not part of the current plan.

Let’s hope it comes to a swift resolve.
 
JonJay said:
This type of suit may require additional discovery. That could be very time consuming and expensive. It could also pull into play all kinds of different liabilities that were not part of the current plan.

Let’s hope it comes to a swift resolve.
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I’d bet this lawsuit gets knocked out with a motion to dismiss early on. Based on my experience, the complaint doesn’t allege any facts that, even if true, rise to the level of fraud.
 
Interesting. Not sure it has legs to go anywhere, but asking the question is free.

Having a lawyer ask it for you, however...
 
airguy said:
Interesting. Not sure it has legs to go anywhere, but asking the question is free.

Having a lawyer ask it for you, however...
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The filing doesn’t list a lawyer. The Creditor seems to be representing themselves.
It still cost the $350 court filing fee.
 
From the FWIW department - I was able to collect 100% of all non-shipped deposits. Before everyone get's excited - I will just disclose I turned it over to the CC company and let their lawyers do the heavy lifiting. It is my belief that Van's will be Ch 7 before long, so I didn't take any more chances.

02/11/2024
Dispute resolved in your favor.
We are happy to notify you that this case has been resolved in your favor. A credit for the disputed amount will be applied to your account, and any temporary credit previously applied during our investigation will be reversed. Any interest or fees that may have been added you your account as a result of this issue have also been corrected. You may consider this case resolved.

Payments & Credits- $43,452.78

I did not pursue the empennage kit as I had received it - and I guess that's my contribution to the Van's mismanagment. Full refund on all other kids ( 25% pd ), engine deposit ( 25% pd ) and prop deposit ( 100% pd ) Lesson's learned for me - insist on 3rd party escrow.

I am about to donate the Emp kit to a local group of kids that wants to learn some skills. C'est La Vie
 
N8DAV8R said:
Looks to me like it will take until some other guy on the internet says he believes they won't go Ch 7. :ROFLMAO:
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No, Van's survival will not be determined by some "guy on the internet" saying so.
I will be convinced that Van's will survive and stay out of Ch 7 when they make good on the $4,802 they owe me, per a pre-Ch 11 judgement lien that that was entered on my behalf by the Marion County Circuit Court of Oregon. The grounds of the small claims lawsuit that I won: breach of contract. Plain and simple
If Van's Ch11 "plan" succeeds, they will make a profit; recoup their huge losses; and make good on all legitimate creditor debt and other claims against them. I would hope the U.S. Bankruptcy Court will make sure of that.
After that happens, and ONLY after that happens will I be satisfied that Van's stays out of Ch 7. And, that is very long row to hoe, and it will not be easy for Van's.
Frankly, I wonder if it will actually happen. I don't blame anyone for questioning if it will happen; I do not think it is a laughing matter; and I would not blame anyone to be hesitant to make any further investment in this company until they see that they make it out of Chapter 11. The determining factor that Van's make it out of Chapter 11 is the "plan" succeeds. We have yet to see the plan.
 
mvanwyk said:
No, Van's survival will not be determined by some "guy on the internet" saying so.
I will be convinced that Van's will survive and stay out of Ch 7 when they make good on the $4,802 they owe me, per a pre-Ch 11 judgement lien that that was entered on my behalf by the Marion County Circuit Court of Oregon. The grounds of the small claims lawsuit that I won: breach of contract. Plain and simple.
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So we have to wait for you to get your $4k back?
Isn't that the same as “some guy on the internet“ saying so?
 
airguy said:
And you're going to wait how many years before you KNOW?
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The question is irrelevant when applied to me. It wouldn't be time, it's would be trust. One of my first lessons
after arriving into the US was that the biggest participation sport here is ripping someone else off for as much
money as they can. Then I found out that Vans basically did the same to depositors, they became just like the rest.
For them to re earn some of my trust 1 to 2 years of good, reliable, trustworthy services.

It doesn't matter anyway, I don't have enough discretionary spending to build. I'm one of those that you,
in your condescending arrogance, considers they should never build an aeroplane or RV, because they couldn't
absorb the cost increases in life and aeroplane building that have happened.

In '12 my crystal ball never saw my wages would not keep up with inflation '12 to '20.
It never showed me covid, with even further living costs increases, or the inflation explosion accompanying it.
It never showed Vans going bust and increasing many of their kits by anything from 25 to near 50%.
They are still bankrupt, they have not survived yet.
It likewise didn't show the massive increases in engines, even rebuilding one.

So I'm out of trust, and money.
 
Jonnyb said:
So we have to wait for you to get your $4k back?
Isn't that the same as “some guy on the internet“ saying so?
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He didn't say that mate. He said "I will be", that doesn't include you. You'll make up your own mind.
 
2bolts said:
The question is irrelevant when applied to me. It wouldn't be time, it's would be trust. One of my first lessons
after arriving into the US was that the biggest participation sport here is ripping someone else off for as much
money as they can. Then I found out that Vans basically did the same to depositors, they became just like the rest.
For them to re earn some of my trust 1 to 2 years of good, reliable, trustworthy services.

It doesn't matter anyway, I don't have enough discretionary spending to build. I'm one of those that you,
in your condescending arrogance, considers they should never build an aeroplane or RV, because they couldn't
absorb the cost increases in life and aeroplane building that have happened.

In '12 my crystal ball never saw my wages would not keep up with inflation '12 to '20.
It never showed me covid, with even further living costs increases, or the inflation explosion accompanying it.
It never showed Vans going bust and increasing many of their kits by anything from 25 to near 50%.
They are still bankrupt, they have not survived yet.
It likewise didn't show the massive increases in engines, even rebuilding one.

So I'm out of trust, and money.
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Caveat emptor applies here in the US for sure. But that lesson is learned much more easily ANYWHERE else in the world… (at least in my own personal experiences). Everyone here still has the opportunity to be made whole if the plan works out as intended. Don’t give up so easily on the dream of building, even if your current situation doesn’t support it. We’re all blessed to have the freedom to pursue these dreams. Best wishes to you that things work out, whatever that means in your situation.
 
Jonnyb said:
So we have to wait for you to get your $4k back?
Isn't that the same as “some guy on the internet“ saying so?
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When the 548 claims totaling in the multi-$million$ are made whole -- or at least those claims that are deemed by the U.S. Bankruptcy Court to be legitimate -- is when you can safely assume that Van's will stay out of Ch 7.
Like I said, we have not yet seen Van's "plan."
It's been pushed off until the end of this month.
 
mvanwyk said:
When the 548 claims totaling in the multi-$million$ are made whole -- or at least those claims that are deemed by the U.S. Bankruptcy Court to be legitimate -- is when you can safely assume that Van's will stay out of Ch 7.
Like I said, we have not yet seen Van's "plan."
It's been pushed off until the end of this month.
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The key for me is the plan.
We need to see that, and the reaction to it before any decision about longevity can be made.
 
Jonnyb said:
The key for me is the plan.
We need to see that, and the reaction to it before any decision about longevity can be made.
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mvanwyk said:
When the 548 claims totaling in the multi-$million$ are made whole -- or at least those claims that are deemed by the U.S. Bankruptcy Court to be legitimate -- is when you can safely assume that Van's will stay out of Ch 7.
Like I said, we have not yet seen Van's "plan."
It's been pushed off until the end of this month.
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Does anyone know when Van's is going to come out of Chapter 11 and start running on their own? Is that what's happening at the end of this month?
 
TedC said:
Does anyone know when Van's is going to come out of Chapter 11 and start running on their own? Is that what's happening at the end of this month?
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Go to this site:

Creditor Info

cases.creditorinfo.com cases.creditorinfo.com
Plow through the documents, if you wish. As far as I can recall, the Van's Ch 11 plan was supposed to be completed sometime in late February or maybe it was early March, and Van's applied for an extension, and the court granted them the extension. I believe the "plan" is supposed to be released late this month.
So, any day now, AFAIK.
 
It was extended until the 29th, but could of course be extended again.
Apparently it’s not unusual.
 
Jonnyb said:
It was extended until the 29th, but could of course be extended again.
Apparently it’s not unusual.
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I'm not a lawyer, so I'm just trying to understand. Is 'releasing the plan', whenever this happens, the SAME thing as 'coming out of Chapter 11', which to me means no longer being under control of the court?
 
TedC said:
I'm not a lawyer, so I'm just trying to understand. Is 'releasing the plan', whenever this happens, the SAME thing as 'coming out of Chapter 11', which to me means no longer being under control of the court?
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I'm no lawyer, either. The "plan" I think outlines the steps the company will take to come out of Chapter 11. The plan specifies financial information -- how much money the company needs to make in the future months/years -- to make a profit and presumably pay off their debts. So, I think it will take years for the plan to be implemented before it could be said that that the company has emerged from Chapter 11. I Googled and came up with this:
"How long is a Chapter 11 plan?
There is no absolute limit on the duration of a Chapter 11 case. Some Chapter 11 cases wrap up within a few months, but it's more usual for it to take six months to two years for a Chapter 11 case to come to a close."
I recall seeing on one of the documents that Van's itself disclosed the challenges. One of the big challenges was: will enough customers agree to the new contracts and pay the additional money to get their kits? I think it was understood that about 70 percent of customers had to agree in order for the plan to work, and to the best of my knowledge, that goal was reached. About 70 percent, or more, have agreed.
Another big risk factor is -- will enough future customers be willing to invest in kits going forward? That's the big question. If you read the documents, Van's itself has admitted that their reputation could be damaged, and it could make future potential customers hesitant to invest unless they know the company is solid and will continue to exist.
It's not enough for existing customers to agree to new contracts.
Van's needs new customers and make a profit and thrive -- and to come out of Chapter 11.
p.s. -- I think that a company is "no longer in Ch 11" is when the company is no longer under the supervision of the U.S. Bankruptcy Court .
 
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mvanwyk said:
I'm no lawyer, either. The "plan" I think outlines the steps the company will take to come out of Chapter 11. The plan specifies financial information -- how much money the company needs to make in the future months/years -- to make a profit and presumably pay off their debts. So, I think it will take years for the plan to be implemented before it could be said that that the company has emerged from Chapter 11. I Googled and came up with this:
"How long is a Chapter 11 plan?
There is no absolute limit on the duration of a Chapter 11 case. Some Chapter 11 cases wrap up within a few months, but it's more usual for it to take six months to two years for a Chapter 11 case to come to a close." ...
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Great explanation, thanks so much.

Reading the February report it seems they are no strangers to a lot of money successfully passing through their hands. Hopefully that will continue with the engines that are now finally starting to be produced again (like mine).
 
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