Cincinnati-based CTL Aerospace Inc. has filed for Chapter 11 bankruptcy in Delaware, weighed down by at least $15 million in debt and a turbulent year marked by material sourcing failures and lender pressure.
In a first-day declaration Monday, President and COO Scott Crislip said the 77-year-old aircraft parts manufacturer intends to restructure its debt or sell itself as a going concern. Despite solid demand from aerospace and defense clients, CTL’s finances unraveled after raw material defects led to losses.
“Garbage In, Garbage Out”
Crislip said faulty materials supplied by two vendors in 2024 caused major manufacturing delays, scrapped products, and a $2.1 million net loss.
“In essence, the adage of ‘garbage in, garbage out’ hurt the company’s bottom line and created chaos at an unprecedented level,” Crislip wrote. Although CTL resolved the quality issues, the damage had already soured relations with Wells Fargo, its secured lender.
Wells Fargo Tightens the Screws
CTL’s bankruptcy petition listed $10 million to $50 million in both assets and liabilities, with Wells Fargo owed $15.1 million across a term loan and revolving facility.
By August, CTL had failed to secure a new lender, investor, or buyer, triggering a loan default. In September, Wells Fargo began sweeping CTL’s accounts, seizing even a $2 million customer advance payment meant for operations.
To keep afloat, CTL had relied on advance payments from clients, but the bank’s cash sweeps stripped the firm of liquidity to cover payroll and raw material costs.
