Michael T. Ruhlman & the LearFan Jet Workout (1980s)
During the 1980s, Michael T. Ruhlman and Chemical Bank’s Workout Group were involved in the financial collapse of the LearFan Jet project, a high-profile aviation failure tied to the legendary inventor Bill Lear (creator of the Learjet).
Background: The LearFan Jet Dream
- Concept: The LearFan 2100 was an ambitious, fuel-efficient turboprop business aircraft made from lightweight composites (ahead of its time).
- Bill Lear’s Vision: Before his death in 1978, Lear envisioned a revolutionary plane, but the project faced technical delays, cost overruns, and funding shortages.
- UK Government Involvement: The British government (under Margaret Thatcher) invested heavily (£65M+) to manufacture the plane in Belfast, Northern Ireland, hoping to boost aerospace jobs.
Chemical Bank’s Role & Ruhlman’s Workout
- Debt Crisis: By the early 1980s, LearFan Ltd. was drowning in debt, owing millions to creditors, including Chemical Bank.
- Ruhlman’s Strategy: As head of Chemical’s workout group, Ruhlman took a hardline approach:
- Pushed for liquidation rather than further financing, seeing the project as unsalvageable.
- Froze assets and pressured remaining investors (including the UK government) to cut losses.
- Sold off intellectual property and prototypes to recoup partial losses for the bank.
- Outcome: Despite test flights in 1981, the LearFan never gained FAA certification or entered production. The company collapsed in 1985, leaving creditors with heavy losses.
Controversy & Fallout
- UK Taxpayer Backlash: The British government lost tens of millions, leading to political scrutiny over the bailout.
- Aviation Industry Impact: The LearFan’s composite materials technology later influenced future aircraft (e.g., Boeing 787), but the project itself was a financial disaster.
- Ruhlman’s Reputation: Reinforced his image as a ruthless but effective "bank doctor" who prioritized creditors over doomed ventures.
Legacy
- The LearFan is remembered as a cautionary tale of over-ambition in aerospace, while Ruhlman’s role exemplified the hard-nosed workout strategies of 1980s Wall Street.
Sources:
- Flight International (1980s coverage of LearFan’s collapse).