Evergreen Vintage cuts deal with World Fuel

Evergreen Vintage Aircraft, an Evergreen International Aviation subsidiary enmeshed in bankruptcy proceedings in U.S. District Court in Portland, has struck a tentative deal with World Fuel to settle $9.1 million in unpaid fuel charges incurred by another bankrupt subsidiary, Evergreen International Aviation.

The settlement would allow World Fuel to retain a lien on a twin-engine Douglas A-26 Invader, and to gain possession and title on the effective date of Evergreen Vintage’s liquidation. The plane, one of an array originally owned by Evergreen Vintage, was used as collateral against the fuel debt.

Under the terms, World Fuel would also retain an unsecured $400,000 claim in the Evergreen Vintage bankruptcy case. The expectation is that the claim will be paid it full under the company’s liquidation plan.

The estate of the late Del Smith, founder of both Evergreen’s global corporate network and McMinnville museum campus, has agreed to pay Evergreen Vintage $20,165 to help make the settlement work. Umpqua Bank has agreed to limit its contingency payment to $469,835, and Evergreen’s counsel has agreed to limit his claim for fees and costs to $155,000.

All terms are subject to court approval during a phone hearing set for Dec. 9. The court has indicated it does not intend to accept any testimony.

Evergreen Vintage negotiated settlement of a $40 million Umpqua Bank in June. However, World Fuel declined to sign on as a party to that deal, opting instead to pursue its claim separately.

Evergreen Vintage Aircraft served as a holding company for Smith’s museum complex. In that capacity, it held the titles to more than two-dozen of the planes displayed in the museum’s aviation arm, along with the aviation exhibit hall and adjacent theater.

EVA’s parent company and an array of other Evergreen subsidiaries are currently in bankruptcy proceedings in U.S. District Court in Delaware. They are facing liquidation.

Under terms of the June settlement, a white knight investor agreed to put up cash to acquire the exhibit hall and theater, and to lease them back to the museum on favorable terms. A similar deal allowed the museum to acquire a number of vintage planes long on display there, and the case from those sales was used to settle with Umpqua.

Evergreen Vintage is now in the process of liquidating its remaining assets.

Two other major elements of the museum, its space arm and water park, are facing potential sale via a foreclosure auction on the courthouse steps later this month. They are owned by the Michael King Smith Foundation, which still owes Hoffman Construction of Portland almost $2 million on their construction.

Negotiations are underway in an attempt to settle the Hoffman claim as well, averting a foreclosure sale.