General Electric Capital Corporation has asked the federal bankruptcy court in Delaware for permission to repossess bankrupt housewares retailer Gottschalks‘ Cessna Citation jet, which was used as collateral for a $3 million loan because Gottschalks has stopped making its monthly payments, according to court documents filed Thursday.
GE Cap said Gottschalks, which filed for Ch. 11 in January, still owed it $2,304,671 as of March 19, 2009.
GE Cap, which was downgraded this week, estimates the jet could be sold for $1.7 million, but faulted Gottschalks for “numerous material maintenance deficiencies” that have lowered the plane’s value.
In its motion, GE also said: “The fact that there are so many Cessna Citation jets on the market for sale at this time has also caused the value of the Airplane to be steadily decreasing.” (That is hardly surprising given all the pressure on some companies, particularly banks like Citigroup, to sell their corporate jets or cancel new orders.)
GE Cap acknowledges that the plane could be one cheap flying machine, but anything would help the company cut its losses, especially if the odds of retrieving more money from Gottschalks seem low.