Research and Development in the Aviation Industry

• The Company specialised in the manufacture of production of carbon products.
• With significant funding from one of its shareholders, the Company was also developing an electric plane.
• The funding was by way of a loan, whereby the shareholder had taken a charge over all of the Company’s assets.
• The two Directors / Shareholders ultimately had a falling out in respect to the ultimate vision of the project.

• The Shareholders were at a stalemate given that they were both 50/50 Director and Shareholders which required each other to agree with any decision made in respect to the future of the Company.  
• The significant debt owing to one of the Shareholders and how does that Shareholder recoup his investment.
• What does the future hold of the business and will it be able to continue to operate.

In our free consultation we discussed how the Shareholder who had advanced the funds would be able to take control of the situation and take the necessary steps to recoup his investment.

Based on this situation, a Receivership was the most suitable option for the company. As Secured Creditor, the Shareholder who had advanced funds, had the ability to appoint a Receiver to the Company’s assets. The Receiver sought to value the assets and in effect sell those assets back to the Secured Creditor in reduction of the secured loan.

Once the Company’s assets were owned by the Secured Creditor, they were able to take the necessary steps to continue to develop the project and commercialise same.