BD-5 historical questions

[Maury Markowitz]

I'm writing a general Wikipedia article on the BD-5 (rewriting
actually) and I'm trying to re-create the story. My interest is
primarily from a "Popular someting" or "something Mechanics" magazine
(currently at my parents house, I'll see if I can get it over the
holidays - I don't think it was either of the "big two") article that
made me fall in love with the plane.

I've read many articles on the topic, looked over cutaways, and read
some of the flamefests here. Many minor details still seem to be
missing, however, and I'd like to clear some of these up. Sources would
be GREATLY appreciated:

1) when was the -5 first announced? 68 seems to be the number, but I've
seen 69 and 71 as well.
2) what was the original planned ship date?
3) can someone give me a rundown of the engine models? I seem to
remember the article mentioning a version of the VW bug motor being
used, possibly as an option?
4) what was the problem with the original V tail? I believe the
magazine article I read referred to the V-tail version AS the A and B
(with the wings changed, as in the later A/B), is this correct?
.... and at what point did they change it to the later design?
5) am I right in reading that the BD-5D was a pre-built FAR'ed version
of the kit?
...if so when did these plans start?
... and was Rutan brought in specifically for this part of the
project?
6) when did work on the BD-5J start?
... was this primarily Rutan's work?
7) when did the kits actually start shipping? Yes, even in partial
form...

8) I have come across a claim about something like a
one-crash-per-flight-hour figure. Why such a high rate? One person (a
local friend) mentioned something about the high thrust line making
landings difficult (more power, nose down), while a thread here
mentioned a 100mph landing speed for the A models, and that the first
four A's crashed. I have also seen a breakdown of every -5J, and it
does indeed have lots of accidents, but it is not clear if these are
being added in or not.
.... so any detail here would be appreciated.

Much of the flamage has to do with people losing their deposits when
the company died. However there are conflicting statements:

9) were the deposits supposedly placed in escrow?
10) I have seen conflicting claims about the "completeness" of the kits
as received. Some suggest it was just the drivetrain missing, others
that large parts of the kit were missing.

And one performance question:

11) The magazine article claimed a 210 mph cruise (max?) for the A
model. I realize that it will be difficult to compare, but what sorts
of speeds do people get with the B's with the larger (Honda typically)
engines?

Any answers would be greatly appreciated! Please, no second hand info!
"I seem to remember the date being..." is ok, but "I heard about a guy
that got a kit and..." is NOT.

Thanks! And sorry for being so demanding, but I'd really like to avoid
a flame fest.

Maury

[John Ammeter]

I'm sure if you were to contact Juan Jiminez you'll be able to learn
much of what you want to know. He's well known as being the local BD5-J
expert. What he doesn't know or can tell you about the BD5 isn't worth
knowing...

I don't have his email address but you might do a Google search in RAH
for his past posts to get an idea of the depth of his knowledge and
abilitys.

John

Maury Markowitz wrote:
> I'm writing a general Wikipedia article on the BD-5 (rewriting
> actually) and I'm trying to re-create the story. My interest is
> primarily from a "Popular someting" or "something Mechanics" magazine
> (currently at my parents house, I'll see if I can get it over the
> holidays - I don't think it was either of the "big two") article that
> made me fall in love with the plane.
>
> I've read many articles on the topic, looked over cutaways, and read
> some of the flamefests here. Many minor details still seem to be
> missing, however, and I'd like to clear some of these up. Sources would
> be GREATLY appreciated:
>
> 1) when was the -5 first announced? 68 seems to be the number, but I've
> seen 69 and 71 as well.
> 2) what was the original planned ship date?
> 3) can someone give me a rundown of the engine models? I seem to
> remember the article mentioning a version of the VW bug motor being
> used, possibly as an option?
> 4) what was the problem with the original V tail? I believe the
> magazine article I read referred to the V-tail version AS the A and B
> (with the wings changed, as in the later A/B), is this correct?
> ... and at what point did they change it to the later design?
> 5) am I right in reading that the BD-5D was a pre-built FAR'ed version
> of the kit?
> ...if so when did these plans start?
> ... and was Rutan brought in specifically for this part of the
> project?
> 6) when did work on the BD-5J start?
> ... was this primarily Rutan's work?
> 7) when did the kits actually start shipping? Yes, even in partial
> form...
>
> 8) I have come across a claim about something like a
> one-crash-per-flight-hour figure. Why such a high rate? One person (a
> local friend) mentioned something about the high thrust line making
> landings difficult (more power, nose down), while a thread here
> mentioned a 100mph landing speed for the A models, and that the first
> four A's crashed. I have also seen a breakdown of every -5J, and it
> does indeed have lots of accidents, but it is not clear if these are
> being added in or not.
> ... so any detail here would be appreciated.
>
> Much of the flamage has to do with people losing their deposits when
> the company died. However there are conflicting statements:
>
> 9) were the deposits supposedly placed in escrow?
> 10) I have seen conflicting claims about the "completeness" of the kits
> as received. Some suggest it was just the drivetrain missing, others
> that large parts of the kit were missing.
>
> And one performance question:
>
> 11) The magazine article claimed a 210 mph cruise (max?) for the A
> model. I realize that it will be difficult to compare, but what sorts
> of speeds do people get with the B's with the larger (Honda typically)
> engines?
>
> Any answers would be greatly appreciated! Please, no second hand info!
> "I seem to remember the date being..." is ok, but "I heard about a guy
> that got a kit and..." is NOT.
>
> Thanks! And sorry for being so demanding, but I'd really like to avoid
> a flame fest.
>
> Maury
>

[Paul Stuart]

You might try contacting the EAA Museum and Library in Oshkosh, WI.
They have the prototype BD5 on display and may have historical records
that go with it.

[Paul Stuart]

You might try contacting the EAA Museum and Library in Oshkosh, WI.
They have the prototype BD5 on display and may have historical records
that go with it.

[keepitrunning]

"Maury Markowitz" > wrote in message
oups.com...
> I'm writing a general Wikipedia article on the BD-5 (rewriting

big snip

> 3) can someone give me a rundown of the engine models? I seem to
> remember the article mentioning a version of the VW bug motor being
> used, possibly as an option?

There is a BD-5V at the Planes of Fame museum in Chino, I was told it was
one of the very few that flew a VW engine.
http://www.planesoffame.org/museum-aircraft.php
Gary

[COLIN LAMB]

I purchased one of the earlier kits, and that was in about 1972 or so. The
engine was never satisfactory, which is one of the reasons the company went
belly up - along with the drive system. I recall that Hirth was one of the
first engines, then Xenoah. Few engines were shipped. We got most of the
parts, except for the engine and drive train.

One of the first "outside" engine was the Honda. Bede put a lot of bucks
into one engine company, and I think it was the Xenoah, but it went belly
up. It was a 2 stroke and Bede never was satisfied with the engine. The VW
engine was never part of the company plans.

Bede used the customers deposits to fund the company. The funds were
represented at one time to be in escrow, but they never were.

Burt Rutan was involved early on as a design engineer.

There were two different wings available in the kit. The long-winged B
version, and the short-winged A version. The difference was just as you
would expect between long wings and short wings.

The V tail was eliminated before any of the kits were shipped.

I started flying in 1969, and seems like all the development came after I
got my license, so I think 1971 is probably the start date. The shipping
date kept getting pushed back, but it was probably 1972 or so. During the
delays, the J version came out. That might have been about 1973.

It is sometimes difficult to squeeze facts out of the old timers, and I am
recalling things as I go. Some engines were shipped. I recall you had a
choice of taking the existing engine (maybe Hirth), or wait until the better
engine came out.

The BD-5 was to the airplane industry as the Tucker was to automobiles. I
think Bede fully intended to meet his promises, but was never satisfied with
the engine/drivetrain and simply spent all of the money trying to make an
acceptable product.

I think I recall my serial number was 2144. Boy, that took a lot of work to
pull that out.

Colin

[Dan, U.S. Air Force, retired]

Wasn't there also a glider version?

Dan, U.S. Air Force, retired

[Ron Wanttaja]

On Wed, 07 Dec 2005 00:23:28 -0600, "Dan, U.S. Air Force, retired"
> wrote:

>Wasn't there also a glider version?

Almost all of them, eventually. :-)

Ron Wanttaja

[COLIN LAMB]

Wasn't there also a glider version?

You are trying to pull something out of dormant memory cells. I vaguely
recall a BD flyer that talked about a glider version - during the
"extension" period. But, the B version wings may actually have been the
glider version. Fact and fiction were often intermixed.

Bede was simply in the wrong field. He should have been a computer software
guy, where it is now called vaporware.

Colin - former BD-5 owner

[John Ousterhout]

Ron Wanttaja wrote:
> On Wed, 07 Dec 2005 00:23:28 -0600, "Dan, U.S. Air Force, retired"
> > wrote:
>
>
>>Wasn't there also a glider version?
>
>
> Almost all of them, eventually. :-)
>
> Ron Wanttaja
>


BD-5 glider: See "Lawn Dart".

- J.O.-

[John Ousterhout]

John Ammeter wrote:
> I'm sure if you were to contact Juan Jiminez you'll be able to learn
> much of what you want to know. He's well known as being the local BD5-J
> expert. What he doesn't know or can tell you about the BD5 isn't worth
> knowing...
>
> I don't have his email address but you might do a Google search in RAH
> for his past posts to get an idea of the depth of his knowledge and
> abilitys.
>
> John

Juan's web page is http://www.bd5.com/ and you can email him at

Of course if you ask Juan about the BD-5 his answer will be even less
objective than if you ask Chuck Slusarczyk, Ron Wanttaja or me about
Captain Zoom.

- John (rah/14) Ousterhout -
http://www.ousterhout.net/zoom.html

[[email protected]]

> Wasn't there also a glider version?

I recall an RC slope glider, I think 40" wingspan.
I saw it in Pacifica (near San Francisco) and it was a real performer

Piero

[Ron Wanttaja]

On Wed, 07 Dec 2005 14:04:22 GMT, "COLIN LAMB" > wrote:

>Wasn't there also a glider version?
>
>You are trying to pull something out of dormant memory cells. I vaguely
>recall a BD flyer that talked about a glider version - during the
>"extension" period. But, the B version wings may actually have been the
>glider version. Fact and fiction were often intermixed.

No, kidding aside, there was a glider version announced (the BD-5S). It did
have longer wings.

Just like any industry, homebuilt airplane companies need publicity to survive.
The best way to get free publicity is to announce a new aircraft model. Make it
look a little different, make it a bit oddball, and the more free publicity
you'll get. I've heard it called the "nut" factor. Make it look a bit nutty,
and you've got the cover of a magazine or two.

Ron Wanttaja

[[email protected]]

>>Sources would
be GREATLY appreciated: <<


Why not just E-mail Jim Bede and ask him? He seems willing to answer
reasonable E-mails.
==============
Leon McAtee

[Bob Kuykendall]

This article, reprinted (with permission, unlike some recent
incarnations) from _Contact!_ magazine, has a lot of fascinating
details about the BD-5 development:

http://www.prime-mover.org/Engines/Torsional/contact1/contact1.html

Thanks, Bob K.
http://www.hpaircraft.com/hp-24

[John Ousterhout]

Ron Wanttaja wrote:
>
> Just like any industry, homebuilt airplane companies need publicity to survive.
> The best way to get free publicity is to announce a new aircraft model. Make it
> look a little different, make it a bit oddball, and the more free publicity
> you'll get. I've heard it called the "nut" factor. Make it look a bit nutty,
> and you've got the cover of a magazine or two.

Hence the Moller Skycar...

- J.O.-

[ChuckSlusarczyk]

In article <zfClf.626756$xm3.66668@attbi_s21>, John Ousterhout says...

>BD-5 glider: See "Lawn Dart".

or also see "Yawn Dart" :-)

Chuck S RAH-14 ret

Merry Christmas to all the RAH-14!!

[Maury Markowitz]

Hi Colin, thanks for the message. I have a follow-up question if I
may...

> The funds were represented at one time to be in escrow, but they never were.

Was this personally represented to you as such? IE, when you
communicated with Bede and gave them your money, were you told the
money was in escrow?

Maury

[Peter Dohm]

"Bob Kuykendall" > wrote in message
oups.com...
> This article, reprinted (with permission, unlike some recent
> incarnations) from _Contact!_ magazine, has a lot of fascinating
> details about the BD-5 development:
>
> http://www.prime-mover.org/Engines/Torsional/contact1/contact1.html
>
> Thanks, Bob K.
> http://www.hpaircraft.com/hp-24
>

That article is a genuine *must read* for anyone interested in alternative
power!

Although not stated, some of the issues discussed go far toward
understanding some of the risks associated with shortened and/or repitched
propellers on certified engines.

Thanks for posting an outstanding link.

Peter

[COLIN LAMB]

Hi Maury:

Well, a lot of beer has passed through, under and over the dam since I
stored the information in my memory, so I cannot guarantee accuracy.

I should preface my comments with a note that I am a lawyer, so I would have
paid a bit more attention than most, probably, and the fact that it is hazy
is pretty much an assurance that there was no direct communication or
written representation that I relied upon.

I know at some point there was a newsletter that did mention the funds would
be in escrow. But, I am not certain whether it was before or after I
purchased my kit. I knew the whole thing was not the best investment, and I
knew I was providing the funds to pay for the kits and that I might lose the
money - but the whole idea of a kit airplane seemed to be a good idea and it
was my way of encouraging such kit airplanes. That the idea was a success
is proved by the many successful kit built airplanes.

I did not come out too bad on the whole venture. Although I did not get the
engine and transmission that I paid for, I did build the rest of the
airplane. When I realized the engine was questionable, and that with this
particular design a less than perfect engine was a hazard, I donated it to
the local community college, where a number of college students got to work
on it. Because the company was still in business, I took the full amount of
the purchase price, and a lot of clecos, as a charitable deduction. So, the
government taxpayers helped fund about 40% of the my loss.

Frankly, it was not the worst investment I ever made, and Bede had honorable
intentions.

Colin

[Morgans]

"Peter Dohm" > wrote
>
> That article is a genuine *must read* for anyone interested in alternative
> power!
>
> Although not stated, some of the issues discussed go far toward
> understanding some of the risks associated with shortened and/or repitched
> propellers on certified engines.
>
> Thanks for posting an outstanding link.

It has been awhile since I read that, but it is a good one. I wonder if
that guy asking about a shaft driven system a couple weeks ago is still
reading the group. I have a feeling his eyes would pop out, like Burt's
almost did right before he left Bede.
--
Jim in NC

[Juan Jimenez]

"Maury Markowitz" > wrote in message
oups.com...

Please coordinate any modification of the Wikipedia article on the BD-5 with
me, if nothing else to make sure it's as complete as possible. As has been
mentioned here, there are few people who know as much about the BD-5 as I
do, and I can point you to people who can give you any info I cannot provide
for you. You're going to get a lot of misinformation in this newsgroup from
people who know next to nothing about the aircraft and are only interested
in advancing personal agendas. You choose what you want to believe, of
course, but there is only one comprehensive source of BD-5 information on
the Internet, that's my site and my mailing list.

You can get the BD-5 story straight from the horse's mouth at
, but here are my answers to your questions:

> 1) when was the -5 first announced? 68 seems to be the number, but I've
> seen 69 and 71 as well.

The all-metal version of the BD-5 was announced to the public on September
1971. There was a composite, v-tailed prototype in the late 60's. The switch
to all-metal was done mostly for manufacturing reasons.

> 2) what was the original planned ship date?

May 24, 1972.

> 3) can someone give me a rundown of the engine models? I seem to
> remember the article mentioning a version of the VW bug motor being
> used, possibly as an option?

Kiekhaefer Aeromarine was the first engine. There were a few more, including
Hirths and finally the Zenoah, which fell through when the lawyers and
insurance company told the manufacturer that all engines (for exp and the
certified BD-5D) had to be manufactured and tested to the certified
standard. I had my doubts about that but have since confirmed it
independently.

Since then a large number of engines have been tried... Honda EB-1 and
EB-2, turbo and normally aspirated, Rotax 532 up to the 618, various Hirths,
VW's, Subaru EA-71 (?) and EA-81, Solar T-62 and variants, AMW, 2SI,
Kawasaki 90hp (of which a model was available specifically for the BD-5),
Mazda Rotary (though never truly successfully because of cooling issues),
Yamaha 1100cc, Suzuki 3- and 4-cylinder, Mercury Marine, Propower, Honda
CRX, Motogucci, Microturbo, Williams, Turbomeca, BMW, KFM, OMV, Hawk, Norton
Rotary, "Polaris" (I think that's the Rotax out of the jet ski), NSU,
Powersports, LATF, JFS-100, Lycoming (successfully!), Rotapower, Allison 250
and a few others I probably haven't heard about.

> 4) what was the problem with the original V tail? I believe the
> magazine article I read referred to the V-tail version AS the A and B
> (with the wings changed, as in the later A/B), is this correct?
> ... and at what point did they change it to the later design?

The A is the 14 ft wingspan, the B is the 21 ft wingspan.

As to the v-tail, this was posted on our mailing list:

"...(Bede) had trouble with the V tail design being too small/ineffective,
so he went to a conventional design with swept plan-form but it too was too
small/ineffective. The swept tailplane did not generate enough down force
for such a short tail moment, not to mention during high AOA it was
blanketed by the wake from the wing, thus the larger unswept tail evolved."

> 5) am I right in reading that the BD-5D was a pre-built FAR'ed version
> of the kit?
> ...if so when did these plans start?
> ... and was Rutan brought in specifically for this part of the
> project?

The BD-5D was to be the certified version, it was fairly well advanced into
the certification process when the company folded. In June 1976, Dan Coen,
who was brought in from Gates Learjet to head the certification program,
produced a report for the newsletter on the status of certification. It is
available here:

http://www.bd5.com/bdn760514.htm

Rutan was brought in from McDonnel & civilian aerodynamics contractor status
on Phantom F4 Wild Weasel conformance packs into the BD-5. Rutan was brought
in to help iron out issues that the flight test program uncovered with the
design, and he also participated in the certification effort.

> 6) when did work on the BD-5J start?
> ... was this primarily Rutan's work?

Probably in 1973, when Microturbo made available the TRS-18 turbojet. It
could be earlier, I don't have a specific date, and no, it was not primarily
Rutan's work. He did work on it to help work out the kinks and made some
design changes to handle higher airspeeds with the associated increase in
loads, etc.

> 7) when did the kits actually start shipping? Yes, even in partial form...

June 1972 is the date I have. They missed the schedule because of warehouse
problems. I restored kit #22 (it is now in Spain and flying) and confirmed
that with paperwork that came with the aircraft's documentation.

> 8) I have come across a claim about something like a
> one-crash-per-flight-hour figure.

The claim is flat wrong. Just one Honda powered BD-5B in Canada had over 800
hours before it lost the throttle cable connection and unfortunately had to
set down in a raspberry patch. The pilot walked away and is finishing his
new aircraft. Bobby Bishop has close to 2,000 hours on the jets and flies
damn near all the time for the military as prime contractor to all the
services for surrogate cruise missile services.

> 9) were the deposits supposedly placed in escrow?

Yes, and it was mostly swallowed up by the creditors after the company
folded.

> 10) I have seen conflicting claims about the "completeness" of the kits
> as received. Some suggest it was just the drivetrain missing, others
> that large parts of the kit were missing.

Most kits were shipped with everything except the drive system, drive shaft
and prop, and the engine, of course.

> 11) The magazine article claimed a 210 mph cruise (max?) for the A
> model. I realize that it will be difficult to compare, but what sorts
> of speeds do people get with the B's with the larger (Honda typically)
> engines?

Vne is 300 mph for all the models. The current world record holder for speed
in the FAI <300kg class is Peter Schichenberger of Austria in a BD-5A
(registered OE-CHM) with a Rotax 618 engine rated at 74hp and A wings (even
though it is listed as BD-5B on the FAI web site, the wings can be
interchanged in 10 minutes at most). The speed over a straight 3 km course
at restricted altitude was measured at 351.39 km/h (just over 218 mph). 200
mph cruise with Turbo Honda is normal, but ONLY if you have the right cruise
prop, or a variable pitch prop like the Quantum that BD Micro sells, and a
clean, properly designed cooling intake. I know owners who regularly cruise
at 180 mph with a Rotax 582.

You can email me at
bd5 at
bd5 dot com

If you have any further questions. My web site is full of historical info,
www.bd5.com, and the BD-5 mailing list has 20,500 messages on the
YahooGroups service (http://groups.yahoo.com/group/bd5) and counts among its
members Jim Bede and a number of the original Bede Aircraft Corp crew. Can't
get any closer to the source than that.

Juan

[Juan Jimenez]

Yes, BD-5S, it was a real dog.

"Dan, U.S. Air Force, retired" > wrote in message
news:Tcvlf.49375$sg5.29515@dukeread12...
> Wasn't there also a glider version?
>
> Dan, U.S. Air Force, retired

[Juan Jimenez]

"COLIN LAMB" > wrote in message
k.net...
> Wasn't there also a glider version?
>
> You are trying to pull something out of dormant memory cells. I vaguely
> recall a BD flyer that talked about a glider version - during the
> "extension" period. But, the B version wings may actually have been the
> glider version. Fact and fiction were often intermixed.

Sorry, but that's incorrect.

http://www.bd5.com/bd5sroll.jpg

> Bede was simply in the wrong field. He should have been a computer
> software guy, where it is now called vaporware.

That's wrong too.

http://www.bd5.com/bdbach.htm

[wmbjk]

On Sun, 18 Dec 2005 08:26:12 -0400, "Juan Jimenez" >
wrote:

>
>"Maury Markowitz" > wrote in message
oups.com...

>> 9) were the deposits supposedly placed in escrow?
>
>Yes, and it was mostly swallowed up by the creditors after the company
>folded.

The key word there is "supposedly". Proper definition of "escrow":

es·crow n.
Money, property, a deed, or a bond put into the custody of a third
party for delivery to a grantee only after the fulfillment of the
conditions specified.

I'm guessing that *your* definition is different, and subject to
change if for example your own money was on the line buying a home.
I'd like to see a BD5 "escrow" agreement which allowed anything other
than return of deposits once it was clear that buyers wouldn't be
getting what they'd ordered.

To the OP: you'd be wise to take anything Juan writes with a grain of
salt.

Wayne

[Huh?]

Escrow funds cannot be swallowed up by creditors after a company folds,
or declares bankruptcy.

>> 9) were the deposits supposedly placed in escrow?
>
> Yes, and it was mostly swallowed up by the creditors after the company
> folded.

[Juan Jimenez]

Not nearly as black and white as you think, particularly when you consider
that those people who placed deposits received substantially what they
ordered (the kits). The BD-5D deposits are another story, I don't know what
happened to those. Nevertheless, the implication is that Jim Bede stole the
escrows. He did not. He came out of the bankruptcy damn near penniless. The
company may not have been managed as well as it should have, but there is
zero evidence anyone's money was stolen. It's that simple.

"Huh?" > wrote in message
news:WOKpf.656833$xm3.82164@attbi_s21...
> Escrow funds cannot be swallowed up by creditors after a company folds, or
> declares bankruptcy.
>
>>> 9) were the deposits supposedly placed in escrow?
>>
>> Yes, and it was mostly swallowed up by the creditors after the company
>> folded.

[Charles K. Scott]

On Tue, 20 Dec 2005 08:34:23 -0400, "Juan Jimenez" >
wrote:

>The BD-5D deposits are another story, I don't know what
>happened to those. Nevertheless, the implication is that Jim Bede stole the
>escrows. He did not. He came out of the bankruptcy damn near penniless. The
>company may not have been managed as well as it should have, but there is
>zero evidence anyone's money was stolen. It's that simple.

I don't understand. You say there is zero evidence that the money was
stolen, but it did get gone, right? Where did it go? If it
disappeared, isn't that prima faci evidence that "anyone's money was
stolen"?

Could it in fact be that simple?

Corky Scott

[Ron Webb]

> I don't understand. You say there is zero evidence that the money was
> stolen, but it did get gone, right? Where did it go? If it
> disappeared, isn't that prima faci evidence that "anyone's money was
> stolen"?
>
> Could it in fact be that simple?
>
> Corky Scott
>
>

By that logic, every company that's ever gone bankrupt did so because money
was stolen. That's just not so.

As far as the integrity of Jim Bede, consider the BD-4, and you come to an
entirely different conclusion. The BD-4 may be the best bang for the buck in
a 4 place homebuilt ever offered. Still going strong 30 years later.

Ron Webb

[[email protected]]

Juan Jimenez wrote:
> Not nearly as black and white as you think, particularly when you consider
> that those people who placed deposits received substantially what they
> ordered (the kits). The BD-5D deposits are another story, I don't know what
> happened to those. Nevertheless, the implication is that Jim Bede stole the
> escrows. He did not. He came out of the bankruptcy damn near penniless. The
> company may not have been managed as well as it should have, but there is
> zero evidence anyone's money was stolen. It's that simple.

Escrows are VERY, VERY, VERY black and white!

It is possible that the terms of the escrow didn't adequately protect
the consumer, but escrows are very black and white. This is one area
of law that is pretty damn straightforward.

The fact that Bede came out of bankruptcy "damn near penniless" is
immaterial in evaluating whether customers were treated fairly.

When companies go out of business, people suffer. It is unfortunate
that most companies continue to receive merchandise from vendors and
money from customers long after the decision to close the doors is
made.

The fact that there is "zero evidence anyone's money was stolen" means
little when there is zero evidence that Bede was honest, either.
Normally, there is presumption of innocence, but when customers do not
receive goods they payed for, the needle starts to swing in the other
direction.

[Matt Whiting]

wrote:
> Juan Jimenez wrote:
>
>>Not nearly as black and white as you think, particularly when you consider
>>that those people who placed deposits received substantially what they
>>ordered (the kits). The BD-5D deposits are another story, I don't know what
>>happened to those. Nevertheless, the implication is that Jim Bede stole the
>>escrows. He did not. He came out of the bankruptcy damn near penniless. The
>>company may not have been managed as well as it should have, but there is
>>zero evidence anyone's money was stolen. It's that simple.
>
>
> Escrows are VERY, VERY, VERY black and white!

Oh, please, nothing to do with the law, banks, brokerage houses, etc.,
is ever black and white. How naive.


Matt

[Peter Dohm]

------------snip------------
> Escrows are VERY, VERY, VERY black and white!
>
------------snip------------

I'm not so sure of that--especially 30 plus years ago.

There may well have been a difference between escrow
held by a third party (broker) and escrow held directly
by a vendor. Add the fact of many partial deliveries to
the equation and you just get more questions.

Add to all of that, the engine development issues cited
in the Contact! article mentioned earlier in this thread
http://www.prime-mover.org/Engines/Torsional/contact1/contact1.html
(thanks to Bob Kuykendall for posting) and you have
the recipe for pretty much what we remember.

It's really a shame--it was such a neat little airplane!

Remember also, as an example, the debacle of deposits
on new real estate (especially condominiums) just a few
years later ...

Peter

Disclaimer: I am not a lawyer, and don't play one on TV.

[Ron Wanttaja]

On Tue, 20 Dec 2005 21:04:04 -0500, "Peter Dohm" > wrote:

>------------snip------------
>> Escrows are VERY, VERY, VERY black and white!
>>
>------------snip------------
>
>I'm not so sure of that--especially 30 plus years ago.

Same thing happened on the BD-12 less than ten years ago... purchasers' money
put into escrow, but they never got a kit or their money back.

Ron Wanttaja

[Peter Dohm]

"Ron Wanttaja" > wrote in message
...
> On Tue, 20 Dec 2005 21:04:04 -0500, "Peter Dohm" >
wrote:
>
> >------------snip------------
> >> Escrows are VERY, VERY, VERY black and white!
> >>
> >------------snip------------
> >
> >I'm not so sure of that--especially 30 plus years ago.
>
> Same thing happened on the BD-12 less than ten years ago... purchasers'
money
> put into escrow, but they never got a kit or their money back.
>
> Ron Wanttaja

You're right, of course.

In my moment of recalling my enfatuation with the BD-5, I forgot about the
BD-10, BD-12, and a couple of others that never "made it".

Nearly all Bede's designs have been intriguing in some way, and even the
"successfull" ones (such as the BD-2 and BD-4) have had reputations a little
like a Bengal tiger as a pet...

Peter

[Morgans]

"Peter Dohm" > wrote

> There may well have been a difference between escrow
> held by a third party (broker) and escrow held directly
> by a vendor.

If it is not held by a third (bonded) party, then it is not escrow. That
fact (or definition) has not changed in the last 100 years.

The person holding the money may call it escrow, but if there is not an
impartial third party in direct control of the money, such as an accountant
or lawyer, your money is not safe from a grab. Bede has been proof of that.
--
Jim in NC

[C.D.Damron]

Ron Wanttaja wrote:

>
> Same thing happened on the BD-12 less than ten years ago... purchasers' money
> put into escrow, but they never got a kit or their money back.

Either the terms of the escrow allowed the funds to be removed from
escrow at a stage that offered little protection to the customer or
something else was horribly wrong and could have been avoided for about
100 bucks in attorney's fees.

[Matt Whiting]

Richard Riley wrote:
> On Tue, 20 Dec 2005 18:24:13 -0800, Ron Wanttaja
> > wrote:
>
> :On Tue, 20 Dec 2005 21:04:04 -0500, "Peter Dohm" > wrote:
> :
> :>------------snip------------
> :>> Escrows are VERY, VERY, VERY black and white!
> :>>
> :>------------snip------------
> :>
> :>I'm not so sure of that--especially 30 plus years ago.
> :
> :Same thing happened on the BD-12 less than ten years ago... purchasers' money
> :put into escrow, but they never got a kit or their money back.
>
> The same thing happens in real estate escrow. The difference is, the
> escrow officer that stole the money goes to jail.
>
> Escrow is black and white, it's money held by a third party. If it
> not held by a third party, it's not escrow. If it IS held by a third
> party, and that party steals it, it's fraud at least, and probably a
> host of other charges.
>
> But no one has ever let slip the name of the third party that held the
> "escrowed" money for any of the BD ventures. Which leads me to
> suspect that it was just put in Bede's general fund, and spent along
> with the rest of the money that came in over the transom.
>
> IF THAT is the case, Jim Bede committed fraud. He told depositers
> that their money would be held in escrow. That was a lie that
> convinced the depositers to give him their money.
>
> So - either Jim Bede placed the deposits with a third party, or he
> didn't. That's pretty black and white.

Is an escrow fund considered a company asset? If it is, then I can see
how a bankruptcy judge would distribute it as part of the creditor
settlement. If it isn't, then it does seem like it should still be
there, bankrutpcy or not.


Matt

[C.D.Damron]

Matt Whiting wrote:

> Is an escrow fund considered a company asset? If it is, then I can see
> how a bankruptcy judge would distribute it as part of the creditor
> settlement. If it isn't, then it does seem like it should still be
> there, bankrutpcy or not.

No, escrow funds are not considered company assets and escrow contracts
usually prevent transfer or reassignment, even in the case of
bankruptcy. They also usually have strict compliance terms with
expiration dates for non-compliance.

It is one area of law where the spirit of the law often trumps contract
law. Meaning, judges get real ****ed off when somebody tried to get
fancy with escrow contract wording to remove normal protections
associated with escrow.

I might be wrong, but I think that vendors are protected if the customer
pops a bankruptcy, but most vendors will opt out given this situation.