The Arizona-based company MD Helicopters, Inc. announced that it has entered into an Asset Purchase Agreement with a creditor consortium led by Bardin Hill and MBIA Insurance Corporation (the “Creditor Consortium”). The Creditor Consortium will acquire nearly all of the Company’s assets and provide new capital to strengthen MD’s financial position and support the Company’s continued ability to manufacture and service its high-performance helicopters. The Company expects to continue its regular course of operations throughout the sale process and remains focused on serving its civil and military customers and working with suppliers as normal. The case is In re MD Helicopters, Inc., U.S. Bankruptcy Court, District of Delaware, No. 22-10263.
As part of the transaction process, the Company today filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in Wilmington, Delaware. Doing so provides a forum that will allow for a quick and orderly sale of the Company, with the Creditor Consortium serving as the “stalking horse bidder” in a court-supervised sale process. Accordingly, the proposed transaction with the Creditor Consortium is subject to higher or otherwise better offers, court approval and other customary conditions. In connection with the proposed sale transaction, the Company has received a commitment of approximately $60 million in debtor-in-possession (“DIP”) financing from accounts managed by Bardin Hill and MB Global Partners.
MD Helicopters, Inc. (formerly McDonnell Douglas Helicopter Systems) is an American aerospace manufacturer. It produces light utility helicopters for commercial and military use. The company began in 1947 as a unit of Hughes Aircraft, then was part of the Hughes Tool Company after 1955. It became the helicopter division of Hughes’ Summa Corporation in 1972, and was finally reformed as Hughes Helicopters, Inc. in 1981. However, throughout its history, the company was informally known as Hughes Helicopters. In January 1984, Hughes Helicopters, Inc. was sold to McDonnell Douglas by Summa Corporation. In 1986, McDonnell Douglas sold all the rights to the Model 300C to Schweizer Aircraft.
On August 1, 1997, McDonnell Douglas merged with Boeing, but Boeing’s plans to sell the civilian helicopter line to Bell Helicopter in 1998 were thwarted by the US Federal Trade Commission (FTC). In 1999, Boeing completed the sale of the civilian line of helicopters to MD Helicopter Holdings Inc., an indirect subsidiary of the Dutch company, RDM Holding Inc. The line included the MD 500 and variants as well as the family of derivative NOTAR aircraft that originated with Hughes Helicopters Inc. Boeing maintained the AH-64 line of helicopters and rights to the NOTAR system. After suffering dismal commercial performance, the company was purchased in 2005 by Patriarch Partners, LLC, an investment fund. Lynn Tilton, the Chief Executive Officer and sole principal of Patriarch Partners, was CEO of MD Helicopters until she relinquished control in March 2020 following bankruptcy court rulings related to Patriarch holdings.