Receiver Named for Aircraft Firm’s Belfast Plant : Fan Holdings Files for Chapter 7

Fan Holdings, parent company of the Lear Fan aircraft firm, filed under Chapter 7 of the U.S. Bankruptcy Code on Wednesday while the British government appointed a receiver who vowed to try to recoup as much as possible from the British investment in a Lear Fan manufacturing plant in Belfast, Northern Ireland.

But a spokesman for company director Moya Lear claimed that new investors may come in to help complete the approval process for the revolutionary Lear Fan plane.

Lear’s spokesman, John Aycoth, said Wednesday that papers were filed in U.S. Bankruptcy Court in Denver, home of Lear Fan’s chairman and chief executive, Robert Burch, who was unavailable for comment.

“That means bankruptcy at its worst,” Lear had said Tuesday.

Chapter 7 normally requires liquidation of assets to satisfy creditors.

In London, Northern Ireland Under Secretary Rhodes Boyson said in a written statement that Michael Jordan of the London accounting firm of Cork, Gully & Co. had been appointed as receiver following Saturday’s collapse of the company.

The British government has invested 57 million pounds, or about $71.8 million, in the project, which had been hoped would provide 2,800 jobs at two factories in Northern Ireland.

Cork, Gully also served as receiver for Northern Ireland’s De Lorean sports-car project, which failed in 1982 after the British government had invested 77 million pounds, which was then $140 million.

The Lear Fan, with rear propellers and a plastic-like fuselage, never received air-worthiness approval from the Federal Aviation Administration. It is unclear who owns the technology and the three Lear Fan planes already built, although the British government owns the Belfast plant.

Lear is the widow of aviation pioneer William Lear, who developed the Learjet, automobile radio and eight-track stereo.

Before he died in 1978, Lear sold the rights to the Learjet to Gates Learjet in 1967.

Mrs. Lear has said her husband’s last words were a plea to finish the Lear Fan, designed to be much lighter because of its shell made of graphite-epoxy resin material and smoother aerodynamically because of its rear propellers.

But problems continued in development at the Reno-based firm, and a group formed by Oppenheimer & Co. invested $30 million in Lear Fan in 1982. A year later, a group of Saudi investors formed Zoysia Corp. and invested another $88 million. Zoysia owns 85% of Fan Holdings, Aycoth said.

But Aycoth said other prospective investors continue to show interest.

Boyson said in a statement issued by the Northern Ireland office in London that the government wants the receiver to recover as much as possible from the company, including the rights to the airplane’s carbon-fiber shell design.