Commander Premier files for Chapter 11 bankruptcy protection

Commander Premier has filed for Chapter 11 bankruptcy protection in an effort to block attempts by Cape Girardeau officials to evict the struggling airplane manufacturer and to stave off creditors who are owed at least $3.5 million.

Commander Premier and its operating subsidiary, CPAC Inc., filed the court papers on June 16 in Tyler, Texas, where its headquarters are.

Company president Greg Walker said in a news release that the company's decision to file Chapter 11 stemmed from the fact that two parties, including the city of Cape Girardeau, had indicated that they were about to commence legal actions that would have prevented a buyer from purchasing the company.

"That left the company with no choice but to file for protection," Walker said in the release.

The other person who had threatened litigation, Walker said in the release, was a private party "claiming to have bought and to hold a very large company note." Walker, who did not return repeated calls from the Southeast Missourian, was quoted in an online magazine article that he hopes a new buyer can be found before the eviction is enforced. Walker also told the magazine that Ronald Strauss, the financier who wants to buy Commander, was the private party who had also threatened legal action.

The Chapter 11 filing has halted the city's attempt to evict Commander for now, said city attorney Eric Cunningham. The bankruptcy court has issued an automatic stay, or temporary hold, which halts actions of creditors against a company, including eviction proceedings.

"Any action the city takes could be a violation and the court could find us in contempt of court," Cunningham said. "The city is not going to be violating the stay."

Chapter 11 bankruptcy buys a company time and allows for restructuring. A company filing Chapter 11 can submit a plan to the court, which can then approve or reject that plan. Cunningham said he had no idea how long the process would take.

"We're going to see what the plan is," Cunningham said. "If they're wanting to reorganize using that facility, the court would have to approve that, too. We are in a bit of a waiting game at this point. We'll just have to wait and see."

A copy of the filing shows the company's estimated assets at less than $50,000 and its number of creditors at no more than 40. A list of the top 20 creditors totals nearly $3.5 million in company debt, including Cape Girardeau with $849,020 owed, the document says. City officials have said that Commander owes $1.2 million in back payments for the 52,000-square-foot facility at Cape Girardeau Regional Airport.

Other creditors include Stonegate Capital Group of Hartford, Conn., $1.18 million; the Missouri Department of Revenue, $10,000; and the IRS, $25,000.

In 2009, Commander's board approved a letter of intent to sell the business to Aero-Base Inc., Strauss' Canada-incorporated company. But Strauss has since been unable to raise the funding needed to complete the purchase.

In the news release announcing the bankruptcy filing, Walker addressed the company's proposed sale to Aero-Base. Walker said delays were caused by the "worldwide financial crisis" and elaborate procedures required to complete international financing has delayed Strauss' ability to fund the transaction.

The bankruptcy filing, Walker said, "was the only way we could protect the company's ability to complete a sale."

Walker added, however, that the company is not legally obligated to close a sale to Strauss because he did not initially want to sign a binding agreement with CPAC until its financing was funded.

"While the deal was largely structured, it has not yet been signed," Walker said. "Accordingly, we have a legal obligation to consider other offers."

Mayor Harry Rediger said the filing should cause only a temporary delay. The city sent an eviction notice to Commander on May 16. Since taking over the building in 2005, Commander made only eight of 59 scheduled lease payments.

"It can't be any more frustrating than it has been for the last year," Rediger said. "It just seems like it's part of the process we're going through."

smoyers@semissourian.com

388-3642

Pertinent address:

Cape Girardeau Regional Airport, Cape Girardeau, MO