Assets and Liabilities Held for Sale

12 Months Ended

Dec. 31, 2021

Assets and Liabilities Held for Sale [Abstract]

ASSETS AND LIABILITIES HELD FOR SALE

6. ASSETS AND LIABILITIES HELD FOR SALE

Assets held for sale at December 31, 2020 included (i) three regional jet aircraft owned by ACY E-175 LLC, (ii) three off-lease regional jet aircraft, (iii) one off-lease turboprop aircraft and (iv) airframe parts from two turboprop aircraft.

(a) ACY E-175 LLC

In March 2021, the Company sold its 100% percent membership interest in ACY E-175 LLC, which owned three Embraer E-175 aircraft on lease to a U.S. regional airline. At December 31, 2020, the Company classified the assets and liabilities of ACY E-175 LLC as held for sale and recorded an impairment loss of $2,649,800.

As a result of the Sale Order approved by the Bankruptcy Court in May 2021, the Company, with the exception of one aircraft that is collateral for a sales-type lease receivable, reclassified all of its remaining aircraft to held for sale. On the Effective date, pursuant to the Plan of Reorganization, the Company settled the liabilities subject to compromise by these assets held for sale. See Note 4 – reorganization adjustment (b). Accordingly, the Company did not have assets or liabilities held for sale as of December 31, 2021.

The table below sets forth   the assets and liabilities that were classified as held for sale at December 31, 2021, September 29, 2021 and December 31, 2020:

	Successor		Predecessor
	December 31,		September 29,		December 31,
	2021		2021		2020
Cash and cash equivalents	$	-	$	-	$	345,900
Restricted cash		-		-		2,346,300
Aircraft and Part-out Assets		-		31,149,300		38,146,700
Notes payable and accrued interest, net		-		-		(13,836,900	)
Derivative liability		-		-		(767,900	)

The pre-tax loss of ACY E-175 LLC for the year ended December 31, 2020 was $1,976,200.

(b) Off-lease aircraft

During 2020, the Company recorded impairment losses of $11,337,200 for an off-lease turboprop aircraft and three off-lease regional jet aircraft that are held for sale and that were written down based on third-party appraisals and $124,900 for a turboprop aircraft that is being sold in parts based on estimated sales proceeds, less cost of sale, provided by the part-out vendors.

(c) Part-out Assets

The Company owned two aircraft being sold in parts (“Part-out Assets”). During 2020, the Company received $391,800 in cash and accrued $34,400 in receivables related to the Part-out Assets. These amounts were accounted for as follows: $117,400 reduced accounts receivable for parts sales accrued in the fourth quarter of 2019; $239,900 reduced the carrying value of the parts; and $68,900 was recorded as gains in excess of the carrying value of the parts.