Down to the Wire to Save XCOR From Chapter 7 Bankruptcy

Lynx cockpit view. (Credit: XCOR)

XCOR has a matter of weeks to conclude a deal with a potential partner or face liquidation under Chapter 7 bankruptcy.

In an Oct. 19 interview, Michael Blum, a member of the board of directors of XCOR who took over as chief executive at the end of June, said the company has been in discussions with potential strategic partners and other investors interested in its propulsion technology and Lynx suborbital spaceplane, but those negotiations have taken longer than expected to finalize.

“Our time is slowly running out,” Blum said. The XCOR board and its major shareholders have been providing a “minimum amount of capital” over the last several months to keep the company going and pay its bills, but said their patience is running out. “Once that happens, the future gets very bleak.”

XCOR has been in discussions with a number of potential partners and investors, Blum said. One approach has involved discussions with strategic partners, including an unidentified large aerospace and defense company primarily interested in XCOR’s propulsion technology and related intellectual property.

XCOR has also been in talks with investor groups. One such group, he said, is particularly interested in XCOR’s Lynx suborbital spaceplane as a means to quickly get into the space tourism market. XCOR has been working on the Lynx for several years, and the prototype vehicle is about two-thirds complete. A second group, Blum said, is in the industrial and manufacturing sector that is already familiar with XCOR.

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  • ThomasLMatula

    If the City of Midland had the courage and vision their Development Corporation would buy them out, finish the Lynx and reap the reward. But they only do that for sports teams…

  • Jimmy S. Overly

    This is a sad end to XCOR. Will that Lynx mockup they toted around get weather proofed and propped up next to Roton at the entrance? SAD!

  • delphinus100

    I hope somebody swoops in to save the day. i always preferred their approach to Virgin Galactic’s…

  • savuporo

    There is no reward to be collected. The entire suborbital fad has proven to be just that

  • savuporo

    You are right. Puttering g around for 15 years and not accomplishing anything is a better approach than puttering around and killing 3 people in the process

  • joe tusgadaro

    Sad, but maybe not inaccurate.

  • Aerospike

    To be fair: as far as I know, XCOR never had the level of funds available that Virgin Galactic had/has.

    In my opinion XCOR is one of the few examples where more money really would have made a difference.

  • savuporo

    If it was worth funding, someone would have funded it. There’s lots of investment capital looking for good use around.

  • Lurker

    Not accomplishing anything? Two rocket powered airframes and numerous completed contracts for various aerospace companies… Doesn’t sound like nothing was accomplished. Did Lynx eat more money than they could handle? It would appear so. I feel it’s a hard stretch to say XCOR was around for this long with all sorts of contracts and investment without any sort of accomplishment.

  • Lurker

    Easier said than done. Companies have to have a certain portfolio for some of those deep pocket investors to want to invest(Gotta make sure the return is worth the risk). Also where you run your offices out of can have a huge impact on but investment. Ever wonder why so many companies incorporate in Delaware? As far as I know XCOR only ran out of California and Texas. Any smart investor is going to look at what the company can actually market and let’s be honest XCOR didn’t have an online store to buy the engines or various other technologies(pumps/valves). So even though they had numbers on their technology and completed contracts that doesn’t mean much if there isn’t a way to actually sell those technologies in a way that makes it worth the money to invest.

  • Lurker

    I can somewhat agree on this point. All of the people with the knowledge to make these systems work have moved on to other companies. Midland development corporation would have to spend more money than they are comfortable with to even try to get this project going again. Also, as some of the other private companies push deeper into space, there will be plenty of opportunities for those companies to fly a non orbital path through our atmosphere and pull in the sector of people that are interested in that type of science/pleasure, if they so choose.

  • redneck

    That is a nonsense statement. Worthwhile things fail to get funded all the time, while fads sometimes get considerable attention. One of my business mistakes before the recession was thinking that the big companies knew what was coming and matching my (much smaller) investments to theirs. Bad move.

  • savuporo

    In other words, it wasn’t worth funding. If you don’t have anything to sell, and no realistic hopes of selling anything in the future you aren’t much of a business.

  • patb2009

    You assume the Lynx can be finished. XCor never released enough information to ever indicate the vehicle design was closed or that the vehicle design was progressing.
    Whenever I asked, I was always informed that details were “Proprietary”.

  • ThomasLMatula

    They also missed marketing opportunities. For example taking their Easy-Rocket and rocket racer on the air show circuit to build awareness. And attract investement.

    Offering their rocket technology to these firms that do jet trucks. Folks forget that Gruman Aviation survived at one point by selling canoes made of aluminum.

    But their biggest mistake I think was bringing old space executives in without any passion for the firm and moving to Texas in the middle of Lynx development.

  • ThomasLMatula

    Yes, they have accomplished a lot. But their expertise was in rocket technology not airframes. They probably should have converted an existing supersonic airframe into a rocket plane before trying the Lynx. One of their engines attached beneath an old Mig-21 could have been a great ride to sell 🙂

  • ThomasLMatula

    Only because the Ansari X-Prize steered it into a dead-end with its focus on suborbital tourism. The SER markets are still there and still mostly neglected.

  • Lurker

    I’ll clarify a little bit but for the most part I’m in agreement. They did have things to sell and could have. They however, didn’t focus on that side of business and it looks like they tried to live on contracts. So plenty of people thought their technologies were worth investing but it looks like a lot of investors focused on the Lynx for a payoff instead of trying to push them to build a base of income on which to survive. Which as you said to be a business you got a sell something and they were selling something they hadn’t finished yet.

  • Stu

    Nothing like chucking good money after bad… Lynx is dead.

  • duheagle

    Four people.

  • duheagle

    Or a less old Mig-29.

  • ThomasLMatula

    The MIG-29 is an option, but the MIG-21, as all aircraft of its generation was “overbuilt”, a desirable feature if you are going to hook a rocket to it. Indeed, a special version of the MIG-21 set an altitude record of 34,714 m in 1962.

    Now a MIG-25 would also be an option, it set an even higher altitude record of 37,550 meters in 1977. But I expect a two-seat MIG-21 would be easier to modify and operate.

    But you really need to see what was on the market, what modifications would be needed and, most important, what the over all cost would be.

  • patb2009

    XCOR was looking at that. There is a man in texas who owned a MIG-21 because it was going to be part of that demo….Idea never progressed passed concept.

  • patb2009

    All great idea but tough businesses. The air show/Truck Show/ Festival stuff is the ‘Carnie” trade… Lots of time on the road, tough life, miserable logistics. Going from San Diego Air/Sea to Reno to Oshkosh to Saint Louis, to the Red Bull Races,,,, That’s 10 months on the road. Hard on staff, family, etc..

  • duheagle

    Using any of these planes as a space tourism vehicle would involve finding one of the relatively rare two-place trainer versions of the selected type as all three designs were baselined as single-seaters. Finding a suitable airframe could well rival doing the mods needed to make it over into even a super-high-altitude atmospheric craft in terms of difficulty and expense. Ongoing maintenance would also be an ongoing headache. I’m sure XCOR flirted with the idea, but old warbirds are expensive mistresses. That likely accounts for the non-consummation of any such relationship.