Erickson Files for Chapter 11 bankruptcy

by San Antonio Attorney

American aviation company Erickson Incorporation, whose main manufacturing and repairs operations are carried out in Jackson County, has sought for bankruptcy protection.

Overwhelmed by debt and marred by the oil industry’s decline, the firm filed for Chapter 11 in a bankruptcy court in Dallas, Texas.

Erickson said in announcement that it will continue its operations without interruption.  With the restructuring, the company expects to save about 700 jobs worldwide and 300 in Oregon.

Erickson is preparing to file a reorganization plan with the support of its creditors in 50 days.  The firm aims to cut down debts and leave bankruptcy early next year, the announcement said.

Erickson President and CEO Jeff Roberts said the firm is facing many challenges that the helicopter industry is dealing with right now.

In spite of the restructuring, the company maintains that it will continue to operate with integrity and ensure that safety is always a priority.

While waiting for court approval, the company’s first day motions are going to allow the firm to operate normally and uphold its supplier and customer relationships.

The company’s well leveraged, $298 million acquirement of Evergreen Helicopters three years ago grew rapidly to $561 million debt as worldwide energy prices dropped, resulting to decrease in the type of services provided by the company.  In addition, Erickson lost major contracts with the government, battering both its income and bottom line.

In the announcement, CFO David Lancelot said the company sees eye to eye with a support agreement its noteholders and lenders have filed, which is likely to bring about an estimated $60 million in fresh funding from current noteholders.

That money would help cut down the Erickson’s debt ratios.

The global firm was founded in 1971 by Jack Erickson.  It has 69 aircrafts and generates $500 million every year.

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