Northstar Aerospace to Sell $70 Million in Assets in Bankruptcy Sale
Tap to Call - (877) 250-8242

Northstar Aerospace to Sell $70 Million in Assets in Bankruptcy Sale

June 27, 2012


Share this article


Northstar Aerospace Inc., a major aircraft parts supplier, is hoping to sell at least $70 million in assets during its bankruptcy liquidation process, according to a recent report from Reuters detailing the struggles of the aerospace company.

The company reportedly sought protection from creditors in both the United States and Canada by filing for Chapter 11 bankruptcy a few weeks ago.

In order to repay its debts, the company has agreed to a tentative deal with Wynnchurch Capital Ltd. that would allow Northstar to sell a large pool of its assets to the group for $70, sources say.

Sources refer to Wynnchurch Capital as a “stalking horse,” which is a term used in corporate bankruptcies to describe a company that is chosen from a group of prospective bidders to make the first offer for the bankruptcy company’s assets.

So, while the term may sound pejorative, companies filing for bankruptcy are often eager to discover potential stalking horses to purchase their assets. But despite the promise of the tentative deal, Northstar officials have expressed concern that the current arrangement would not allow it to repay its secured creditors.

As a result, the company is still seeking a better bid for its remaining assets. By filing for bankruptcy, Northstar joined a growing list of aircraft manufacturers who are either in bankruptcy court or are considering filing for debt relief.

The recent recession sapped many airlines’ demand for new aircrafts, and the imminent removal of armed forces in Iraq and Afghanistan, coupled with the budget cuts for the U.S. Department of Defense, have reduced the government’s demand for aircraft parts.

Since Northstar’s largest customers include the U.S. government and several small private aircraft companies, its financial health suffered a serious decline during the past few years.

During its bankruptcy filing, though, Northstar says that it has received nearly $4 million in extra financing from various lenders, suggesting that some creditors believe there is still some life in the company.

But Northstar faces a long road to financial health, as it has upwards of $100 million in debt, and only $70 million in assets, according to sources.

Back to Newspaper Home

Tap to Call - (877) 250-8242

Copyright © 2018 MH Sub I, LLC. All rights reserved. ® Self-help services may not be permitted in all states. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site. The attorney listings on this site are paid attorney advertising. In some states, the information on this website may be considered a lawyer referral service. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state.Your use of this website constitutes acceptance of the "Terms & Conditions", "Supplemental Terms", "Privacy Policy" and "Cookie Policy."