SANDPOINT — Tamarack Aerospace’s plan to repay all its debtors as it emerges from voluntary reorganization bankruptcy has been approved by the U.S. Bankruptcy Court.
With the Chapter 11 disclosure statement approved by the court, Tamarack Aerospace officials said they expect the company to come out of bankruptcy early in early spring.
“This court approval and our continued sales of the active winglets is a testament to the financial health of Tamarack, the robustness of our product, and our commitment to our customers, vendors, and investors,” said Tamarack President Jacob Klinginsmith in a press release.
Tamarack voluntarily went into Chapter 11 bankruptcy in June 2019 and could exit the reorganization as soon as late February or early spring, an unusually short time for this kind of reorganization process, company officials said.
Tamarack is rebounding from a false incident report last spring that led to the brief grounding of its Cessna Citation Jet fleet equipped with the active winglets.
A pilot in Europe had reported that, while climbing to 3,000 feet, the ATLAS system, which is part of the Tamarack active winglet system, failed, causing his jet to enter a steep 90-degree left turn, sent the nose downward and increased the plane’s speed. However, when data was downloaded, information showed a lesser turn over a longer period of time, said Scott Sobel, senior vice president for kglobal, a communications and public relations firm hired by Tamarack.
Not only did the pilot not heed service bulletins, which outlined a quick fix for a problem with the winglets, the problem with his plane turned out to be connected to a screw problem, Sobel said.
The incident was enough, coming amid a National Transportation Safety Board investigation into 2018 crash, to prompt airworthiness directives from the European Union Aviation Safety Agency and Federal Aviation Administration in April and May 2018, effectively grounding Cessna 525-series aircraft equipped with Tamarack’s active load alleviation system, also known as ATLAS, which improves climb capability and fuel efficiency by reducing drag.
The FAA approved an alternative method of compliance for all Citation jets fitted with active winglets on July 10 to return the aircraft to flying status. It requires operators to comply with a service bulletin which calls for the replacement or upgrade of an actuator motor on the trailing edge of the camber service.
There have been no reported incidents with the system with the latest upgrades, Sobel said.
The plan to pay back investors follows the court’s authorization in mid-August to accept the full amount of $1.95 million in committed debtor-in-possession financing, a special kind of financing meant for companies that are in distress and in bankruptcy. The financing method typically has priority over existing debt, equity and other claims.
The new liquidity was provided by a consortium of friendly investors which included active winglet customers, vendors and other company stakeholders who committed to Tamarack’s future.
The system is composed of wing extensions with upturned winglets and additional flight-control surfaces which are meant to improve range, speed and fuel efficiency by as much as 25 percent in some cases. The system also allows for a smoother flight, a faster and higher takeoff and less wear and tear on the airplane, officials said.
“Tamarack always has our eye fixed on the future to equip a fast-growing fleet of all kinds of business, commercial and military airframes. Our Active Winglets save substantial fuel and reduce the carbon footprint — many times more than the now obsolete passive winglets,” said Tamarack Founder and CEO Nick Guida, who has been growing back staff as installations continue and service center numbers increase during the deliberate Chapter 11 process.
At 30-plus employees prior to the directives, Tamarack dropped to half that but the company’s total employees is now in the 20s with more growth on the horizon.
With the company set to exit Chapter 11, the future looks bright, Sobel said.
All objective indications are that the company is set to enter a growth phase.
“They have a great product that addresses a need, and this is something that really needs to be emphasized in everything we do right now, they got a great product that addresses a huge sustainability issue in aviation these days,” he said. “There’s some real important people in government and otherwise who’ve now heard about Tamarack and we’re looking to make blue skies greener.”
Caroline Lobsinger can be reached by email at email@example.com and follow her on Twitter @CarolDailyBee.