A first-ever attempt to auction off an entire aircraft manufacturing company at AirVenture didn’t go off quite as planned.
The auction of Lake Aircraft’s assets, from its Type Certificates to parts, attracted more than 50 interested spectators during the big show in Oshkosh, but auctioneer Marty Higgenbotham failed to get a single bid. His auction house, Higgenbotham Auctioneers Inc., which has specialized in the sale of real estate and intellectual property since 1959, is continuing its efforts to complete the sale, working with three potential buyers, including one who was at the auction.
“Apparently the people in attendance based their opinion of value on the company’s perceived history, rather than the value of the assets for sale, most notably the Type Certificate and supporting documentation,” said Scott Oglesby, auction manager. “We are now working with several entities who have a better understanding of the value of the assets and the ability to capitalize upon that potential.”
The moribund company is owned by Revo Inc., a company led by Armand Rivard, who won back the Lake assets after a contentious court battle with now-defunct LanShe Aerospace.
The Lake Amphibian was the brainchild of Herb Linblad and Dave Thurston, who made names for themselves at the Grumman and Republic Aircraft companies. In the 1940s, the pair pooled their talents to develop the Colonial Skimmer, a two-place, 125-hp airplane that was FAA certified in 1955. The company grew, eventually producing the 200-hp Buccaneer. Rivard bought his first Lake Amphibian in 1970 and became involved in the company in 1971. Over the next three decades, the company certified the six-place, 250-hp Renegade, the 270-hp SeaFury and the 290-hp SeaWolf.
In late 2002, the Lake line was bought by Wadi Rahim, who moved it from Sanford, Maine, to Ft. Pierce, Fla. About a year later, Rahim and Rivard became embroiled in a lawsuit over the sale. In July 2004, Rahim’s company, called LanShe Aerospace, shut its doors after running out of working capital. At this year’s Lakeathon, an annual gathering of Lake owners, Rivard said the courts had returned all the Lake assets to him, but that he was ready to retire.
In a first of its kind for AirVenture — and possibly GA — the Lake assets were put on the sale block in a traditional “outcry” auction. Higgenbotham opened the auction with a lengthy explanation of what exactly was for sale: Type Certificates and STCs, original engineering reports, all sorts of records from the company, tooling, and a parts inventory appraised at about $4.35 million. To be eligible to bid, interested parties had to “pre-qualify” by putting up $100,000. While several were pre-qualified in the weeks before the auction, auctioneers were still taking checks right until the auction started. Seven people were eligible to bid at the auction.
After explaining exactly what was for sale, Higgenbotham began the auction calling for a bid of $20 million. That soon fell to $10 million, then $5 million, then $3 million. The only sound was Higgenbotham’s high-energy auctioneering. The crowd remained mute.
“It takes two things to make an auction work — an auctioneer and bidders,” he told the crowd. “I know no one wants to be the opening bid, but folks I’m not seeing any serious bidders. If this ain’t worth the price of the parts, I can’t help you.”
Higgenbotham then took a break, giving people a chance to make phone calls and talk to representatives of the auction house. During this, the crowd was entertained by a keyboard player and a slide show of photos of Lake aircraft.
When Higgenbotham returned to the podium to resume the auction, the crowd continued its silence.
“People, please get real, get serious,” he said. “This is not an opportunity you’ll see in the classified ads.”
He then noted that a friend had just sold a car at auction for $6.5 million, while he recently auctioned off a home for $15 million.
After the auction, many people in the audience noted they were surprised at the dollar amounts of the opening bid. At least one bidder noted that he was interested only in the parts.
“This was not a parts sale,” said Oglesby of Higgenbotham Auctioneers. “The Number One asset is the paper — the Type Certificate and STCs. The parts inventory and tooling will help the new owner get up and running.”
While disheartened by the Oshkosh auction, Oglesby continues working to find a buyer for the Lake assets. “We want to get this company sold, not just because it’s our job, but because we want to get support for the existing fleet, as well as get new aircraft flying,” he said.