Thursday, January 02, 2014

5,000 creditors: Evergreen International Airlines files voluntary Chapter 7 petition on New Year's Eve

McMinnville-based Evergreen International Airlines took a large step toward dissolving itself Tuesday by filing a Chapter 7 petition in federal bankruptcy court in Delaware. The filing followed by about two weeks an involuntary petition by a group of creditors.

The filing estimated the total assets of the Evergreen companies at up to $100 million and total debts up to $500 million. Evergreen said it has up to 5,000 creditors. The filing includes a 108-page list of creditors.

A former Evergreen employee relayed a Dec. 31 email from Evergreen's director of human relations that noted that a trustee will handle all human relations and public relations functions. The director, Monique Gregory, did not identify a trustee and the bankruptcy file lists no information beyond the company's voluntary petition. 

Gregory's email read:

To: all employees

Unfortunately, there is NO Cobra options available.  Please visit or the website that is specific to your state health insurance.  This will give you options for health coverage.

The 401k is managed by Heintzberger / Payne and you may reach them at 1-888-937-4015.

As of today, the HR and PR department will be handled by the trustee.

Monique Gregory

Evergreen officials and lawyers did not respond to phone and email queries on the holiday. Evergreen's website still contains a Nov. 8 note from founder Delford Smith that insisted the company would continue to serve its customers. He said much the same in an interview with The Oregonian less than two weeks ago.

The bankruptcy filing lists seven entities as submitting the Chapter 7 petition: Evergreen Aviation Ground Logistics Enterprise; Evergreen Defense and Security Services; Evergreen International Airlines; Evergreen International Aviation; Evergreen Systems Logistics; Evergreen Trade; and Supertanker Services.

The filing appears to mark the end for a proud company with a history of providing cargo and passenger services to the U.S. government and other customers. Smith founded the company as Evergreen Helicopters in 1960. Last year, Evergreen sold the helicopter company to Portland's Erickson Air-Crane for $250 million in cash and notes. Smith said later that money would be used to pay down debt.

Still unsettled is the fate of Evergreen's non-profit affiliates, the Evergreen Aviation and Space Museum and the Wings and Waves Waterpark. The buildings are landmarks along Oregon Highway 18 on the eastern edge of McMinnville. The state Department of Justice has been investigating whether Evergreen's for-profit operations improperly commingled funds with the non-profits.

Story and Comments/Reaction: 

The final chapter in the Evergreen International Airlines story 

 The Oregonian has written extensively on Evergreen and its founder, Delford Smith. 

Last month, Richard Read cataloged Evergreen's aircraft, which range from Boeing 747s to a Learjet.
Read and our colleague Mark Graves compiled an interactive timeline tracing significant events in Evergreen history, along with an infographic that lays out the relationships of the various companies founded or controlled by Smith. By clicking on the various links, you can see accounts of such episodes as Evergreen's denial that it worked for the Central Intelligence Agency and the arrival of the Spruce Goose at the Evegreen Aviation and Space Museum.

We have written about the Oregon Attorney General's interest in whether Evergreen improperly shifted assets between its for-profit operations and the non-profit Evergreen museum and water park. And Read wrote last month about creditors' interest in the non-profit assets. 

In June 2001, we published this capsule bio for Del Smith:

Born: Feb. 25, 1930, Seattle

Education: B.S., University of Washington, 1953.

Founder: Evergreen International Aviation Inc., McMinnville.

Quotes: "My mother always taught me that the harder you worked, the luckier you got." "We're not trying to get any applause. We're just trying to help those who need it." "I'm a big believer in performance measuring. If you can't measure it, you aren't managing it properly." "Appearance is important. A lot of customers buy the shine."

Personal heroes: Mikhail Gorbachev; Mahatma Gandhi; Margaret Thatcher; the Dalai Lama.

Builder: Captain Michael King Smith Evergreen Aviation Educational Institute, new home of Howard Hughes' Spruce Goose airplane.

Some charitable causes: Oregon Public Broadcasting, Oregon Symphony, Portland Boys and Girls Clubs, Portland Art Museum, Oregon Garden, Linfield College, World Affairs Council.

On Thursday, the bankruptcy court in Delaware assigned a judge and set the first meeting of Evergreen's creditors for Jan. 31. The trustee assigned to the case is Alfred Thomas Giuliano of West Berlin, N.J.

-- Mike Francis