Douglas Brunner writes:

<<I do not think Chelton should get a complete  pass
 here.  Direct 2 was an authorized Chelton dealer (wasn't it the only one
 authorized  to sell the experimental version of the Chelton? - correct me if I am
 wrong)  I do  think Chelton bears some responsibility for what one of their authorized
 dealers does.
>>

Doug, if we extend your argument then Xbow, FreeFlight, TruTrack, Pinpoint and even Garmin is also responsible for the actions of their authorized dealer, D2. Would you argue that they also owe D2's customers something?

Kirk told me that D2 had a license to purchase the parts for, assemble and "D2 label" the experimental displays and that these were then D2 labeled products that would run CFS software. I never saw a "Chelton" logo on the display systems D2 sold. Your computer may show the Microsoft logo when it turns on but that doesn't make it a MIcrosoft computer. The computer manufacturer is on the computer's label. D2 also purchased other components, AHRS, GPS, Connectors etc. from other manufacturers, and put together "systems" they then sold. The only component that came directly from CFS to the end user was the software.  Jeppesen also provided software. Would you argue that Jeppesen now owes D2 customers an IDU or an ADAHRS or a GPS?

My understanding is that D2 was an independent dealer with an arms length relationship with CFS. D2's implosion is a D2 problem. It is not a "Chelton Debacle" anymore than it is a "Xbow Debacle or a "Garmin Debacle". Chuck's salesman analogy does not apply in this case as D2 was not an "employee" of CFS. Kirk and Peter owned D2 and had their own employees.

Chuck also suggests that there are "moral" and "market" obligations that are, presumably, in addition to the legal responsibilities of a corporation. While the root of corporation is corpus, latin for body, I think we can agree that corporations are bodies without souls, and therefore without morality. "Market obligations" is also a non sequitur.  The raison d'être of most any business is to survive and prosper, to make the most  money with the least expense. To do this the company must satisfy the market with goods and / or services. There is no direct obligation without legal imperative.

At this point we should defer to the legal analysis of the applicable contracts and agreements with respect to the law.

Here are some rhetorical questions for the bonafide legal minds out there. Suppose CFS gave two displays to someone who paid D2 in full but did not receive anything from D2. Would that person still have a claim against D2? Could they collect their money back from bankruptcy court? Would they have to declare the value of the two screens on their taxes as a "gift"? If  the displays did satisfy some portion of D2's liabilities wouldn't they have to go through the bankruptcy court? Should one creditor get preferential treatment over another?

Again, all this is pure speculation. 

I am confident that CFS and the remaining dealers (Lancair, SteinAir etc.) are working to minimize the collective pain and a plan to move forward will be forthcoming ASAP. If everyone keeps a level head with a minimum of histrionics then the situation will likely end as well as possible. If everyone grabs the scythes and pitchforks to cries of "A riot is an ugly thing....and it's about time we had one!"  then things will not end as well as possible. 

Regards
Brent Regan