AvCraft Aviation
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AvCraft Aviation was a U.S. based manufacturing, completion and product support company for the 328 turboprop and 328JET.
Avcraft purchased production of the Dornier 328JET from the receivers of Fairchild Dornier GmbH in December 2002 following the European company's demise. The final transfers of the type and production certificates were completed in the third quarter of 2003.
The company intended to restart 328Jet production in Germany during 2004 and was bringing the production of its wing, formerly outsourced, in-house.
By August, 2004, Avcraft had successfully established itself in the regional airline market and was entering the corporate aircraft market, placing previously unsold Dornier product with a wide range of customers. It exhibited at the Farnborough Air Show 2004 and joined major industry associations - its CEO Ben Bartel clearly intending the company to become a permanent feature of the regional aircraft manufacturing sector.
[edit] Administration
In March, 2005, the company went into administration citing a lack of cash caused, they said, by an airline failing to accept delivery of completed aircraft. In July, 2005, Bartel was arrested in Germany following allegations of tax fraud.
Sales of the 328 continued into September 2005 as the company's administrator sought to find a buyer for the enterprise, saying that it could sustain liquidity until 2006. Future production of other Dornier designs remains in doubt.
According to a report in the German news magazine In Focus, Bartel is suspected of evading over seven million euros (approximately $10 million USD) in taxes to German authorities through fictitious transactions in the Cayman Islands.
Bartel is the principal owner of AvCraft Aviation Holdings, LLC which owns the AvCraft Support Services facility at the Myrtle Beach International Airport. He is also the principal owner of AvCraft Support Services. ... Bartel purchased the Fairchild Dornier 328 production facility in Oberpfaffenhofen, Germany out of bankruptcy in late 2003, changing the name to AvCraft Aerospace GmbH. ... Shortly after the purchase of the German factory, Bartel announced he was merging the Ohio and Texas operations into AvCraft Support Services to be located at Myrtle Beach both entities having fairly large accumulated deficits.
(In fact, the June 30, 2003 financial statements indicated that Air Camis, and AvCraft Aviation, Inc. had a negative net worth combined of over $5,000,000. The company’s 2003 audited financial statements indicated that the company wrote off loans to affiliated companies amounting to over $6,000,000 in 2003 and 2004 and that these amounts had been disbursed in satisfaction of obligations of Air Camis and AvCraft Aviation. It is believed that these obligations were ultimately secured by assets of Mr. Ben Bartel and/or immediate family members. Interestingly, in the pro-forma consolidated balance sheets in a Confidential Information Memorandum prepared in 2003 for AvCraft/Fairchild-Dornier Holdings LLC, the parent of AvCraft Aviation (while the company was searching for bridge financing) reflected that Mr. Bartel paid in capital of over $8,000,000. Although it is not totally clear what was included in this figure, the corporate structure chart indicates that Mr. Bartel was "contributing", among other things, the net assets of Air Camis, Inc. and AvCraft Aviation, Inc. into the company as part of the founders’/owners’ capital contribution. The contribution of the assets of these two companies was positioned as a “selling point” to potential investors.)
Bartel announced in a February 2004 interview with Aviation International magazine that the German production facility would restart operations in March 2004. At that time, Bartel said the European subsidiary of Maple Financial Group was providing funding of approximately $100 million for the restart of the production line.
(This financing was arranged by Lawrence J. Hoffman,Founder , Chairman and Chief Executive Officer of HFS Capital, LLC,a licensed broker/dealer in Virginia and an original investor, and for a time acting CFO and Executive Vice President of AvCraftFairchild/Dornier Holdings, LLC. Hoffman's relationship with Avcraft was severed shortly after this financing was completed. Mr. Hoffman’s minority interest had been redeemed sometime in late 2003 or early 2004. Through an entitiy controlled by him he also acquired at least one of the AvCraft (Dornier) 328 aircraft. He currently is the Chairman , Chief Executive Officer and Chief Financial Officer of Private Air Charters, LLC which operates Dornier 328 planes as primary charter vehicles. He also is President and Founder of "Lawrence J. Hoffman, CPA, P.C." a certified public accounting and consulting firm. Of note, Mr. Hoffman is also a Certified Fraud Examiner and privides forensic accounting services for clients.
Bartel changed that story during a press conference at the British air show in Farnsworth, England during the summer of 2004, when he announced the sale of 13 Dornier 328 aircraft through a subsidiary in the Cayman Islands. Bartel said the Cayman subsidiary would provide tax-free money to the German production facility in order to fund the restart of the production line. The 13 aircraft were among 18 completed, but unsold, aircraft Bartel acquired when he bought the production facility out of bankruptcy.
According to early 2004 statements by Bartel, the Myrtle Beach facility planned to provide maintenance and refurbishment for existing Dornier 328's in the United States, as well as providing paint and completion facilities for new production aircraft from the Oberpfaffenhofen plant. He estimated the Myrtle Beach plant would ultimately provide 300-400 high paying jobs in Horry County. ... Bartel was provided a combined incentive package of $1,075,000, $750,000 from the Myrtle Beach Air Force Base Redevelopment Authority and $325,000 from the state of South Carolina, to relocate to Myrtle Beach. ... Governor Mark Sanford joined local officials in welcoming Bartel and AvCraft to Myrtle Beach in December 2003. ... By the time Bartel filed bankruptcy for the production facility, only two aircraft had been produced by the factory and both of those had been partially completed before Bartel bought the facility. ... During second reading of the lease agreement, Bartel spoke to council members about the Myrtle Beach facility. His opening comments included charges of "inaccurate and shoddy newspaper reporting" in which Bartel said he was "being accused of misleading people."
Bartel told council "the deal was to provide quality jobs and we've done that." He also asked for deletion of a clause in the lease agreement requiring county approval for "any change in the Lessee's existence as a business entity." ... Bartel acknowledged the Cayman subsidiary, but did not supply specific information about the airplane deal. ... DeFeo was instrumental in first introducing Bartel to local officials. ... With the German production facility in bankruptcy, most of the North American fleet of Dornier 328's stored at the Myrtle Beach airport, the company's former headquarters closed, and Bartel now under arrest in Germany, the future appears uncertain for the Myrtle Beach facility. ... "Ben Bartel is the principal owner of AvCraft Aviation Holdings and AvCraft Support Services, but he is not an officer of nor involved in the management of the Myrtle Beach plant," said Hill. ... "AvCraft Support Services does not rely on cash infusions from Leesburg or Bartel. ... "We received notification August 1 from Mike Hill, General Manager of AvCraft Support Services, that Ben Bartel is no longer a director with the company and Joe Reagan is the new Chief Executive Officer for AvCraft Support Services," said Bourcier. ... "The Department of Airports has a lease agreement with AvCraft Support Services and not with Ben Bartel, so we do not foresee there being an issue with the agreement. ... "From my perspective, what happens with Bartel in Germany does not affect our relations with the company in Myrtle Beach.
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