=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/n/a/2008/12/15/national/a= 005955S87.DTL --------------------------------------------------------------------- Monday, December 15, 2008 (AP) Plane owners grounded by manufacturer bankruptcy By BARRY MASSEY, Associated Press Writer (12-15) 00:59 PST Santa Fe, N.M. (AP) -- It's a buyer's nightmare: Plunk down more than $1 million for a new twin-engine airplane and after it finally arrives, the manufacturer goes out of business. That's the scenario facing a handful of people across the country and ev= en New Mexico's state police, all caught in the debris of a startup aircraft company's collapse. They're owners of what the aviation industry calls "orphan" planes: There's no warranty on their new aircraft and no factory to easily supply spare parts. The owners' predicament emerged after Englewood, Colo.-based Adam Aircra= ft closed its doors and filed for bankruptcy earlier this year after failing to secure tens of millions of dollars in financing in the nation's credit-strapped economy. The company's assets have been liquidated. Without support from a manufacturer, "then eventually the parts will become time limited and the aircraft will become grounded. Ultimately, that is probably what will happen," said Mike Hackett, a retired airline pilot from St. Helena, Calif. His plane sits idle because one of its parts has reached the factory's original flight time limits. He's uncertain where he'll get replacements fabricated. In January, New Mexico's Department of Public Safety received the last of five Adam A500 planes that went to buyers. A month later, the company permanently shut its doors. State police still fly the new plane for reconnoissance and surveillance, such as tracking drug dealers, as well as search and rescue and traffic patrols. Unlike private owners, New Mexico's law enforcement agency can operate i= ts A500 as a "public use" aircraft. That permits the state to fly without meeting many of the regulations imposed by the Federal Aviation Administration on general aviation aircraft. The state also has its own technician certified to service the plane. Factory training was part of the $1.2 million purchase package. Public Safety Secretary John Denko, a pilot for 44 years, said the agency was unaware of the manufacturer's precarious finances when the state purchased the airplane. "Had I any idea that the aircraft was going into bankruptcy, we would never have bought it," said Denko. A legislative committee has questioned the contracting procedures for the plane and issued a report faulting the state's procurement agency for inadequate research on the manufacturer's finances. But Denko praises the plane's design and capabilities, contending it's well suited for low-altitude flights in turbulent mountainous terrain where state police use the aircraft. "We all wish we had a crystal ball but we did the best that we could at the time. I'm still happy we got the aircraft. I think we are going to receive our money out of this thing many times over," said Denko. But other private owners aren't so lucky. They're left with questions and no solid answers about the future of their planes. Some replacement parts, such as for electronic equipment and engines, may come from the independent, third-party companies that supplied them to the aircraft manufacturer. But what happens when the fuselage and its components reach flight time limits? Hackett said the A500's limits are much shorter than for most aircraft because the manufacturer hadn't completed the testing and procedures for demonstrating a longer fuselage lifespan. Under Chapter 7 bankruptcy protection, Adam liquidated its holdings and shut down. In April, another company bought Adam's assets and hoped to move ahead with the jet. However, that firm — AAI Acquisitions Inc. — announced cutbacks in late October and has at least temporarily suspended development of the jet. That leaves Dr. Gilbert Kliman, a San Francisco psychiatrist, up in the air, so to speak. He planned to use his A500 for travel across the country in his psychiatric consulting practice. But now he can't safely fly in bad weather. "I'm stuck because I owe the bank the majority of the cost of this $1.25 million airplane," he said, "whereas it's value may be one or two hundred thousand dollars of parts right now." -------------------------------------= --------------------------------- Copyright 2008 AP <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> If you wish to unsubscribe from the AIRLINE List, please send an E-mail to: "listserv@xxxxxxxxxxxxxxxxx". Within the body of the text, only write the following:"SIGNOFF AIRLINE".