Pictured is an airplane made by Luscombe Aircraft Corp. The company was trying to establish a manufacturing operation at the Chautauqua County Airport at Jamestown before closing. Submitted file photo

The owners of a failed venture to create an airplane manufacturing company at the Chautauqua County Airport in Jamestown have been ordered to repay more than $400,000 borrowed from the Chautauqua County IDA and Southern Tier Enterprise Development Organization.

The IDA and STEDO had filed suit in state Supreme Court in Mayville seeking repayment of loans to Luscombe Aircraft Corporation and its principal owners, Steven Testrake and Stephen Young.

Luscombe Aircraft Corporation took out two loans from the county IDA, with Testrake and Young executing personal guarantees on the loans. The aircraft company began making monthly payments from March 1, 2021, until May 4, 2023, when Luscombe defaulted on the loans. The IDA then called the note due and demanded payment of the amount due. The IDA also took possession of Luscombe’s collateral and sold it, applying the sale proceeds as a credit toward the amount owed. Then, the IDA demanded payment from Testrake and Young. The STEDO loan had a personal guarantee by only Testrake, with payments made from Feb. 1, 2023, until Sept. 1, 2023.

The court granted summary judgment against Testrake while summary judgment against Luscombe was denied because the county and STEDO have received a default judgement against the defunct company. Young opposed the motions for summary judgement against him arguing in court filings that he did not execute the guaranty in his personal capacity, wasn’t given credit against the amount due and owing for improvements he made to the company’s property at the airport, and that the amount due isn’t correct because the collateral disposition was not commercially reasonable.

“ln any event, with respect to the substantive arguments made in opposition to the summary judgment motion, the court first addresses Mr. Young’s contention that he did not sign the guaranty in his personal capacity. This argument is rejected because it is belied by the guaranty which is clear and unambiguous on its face. Mr. Young signed the guaranty in his individual capacity and not as president of Luscombe,” wrote judge Emilio Colaiacovo in a decision on motions in the case issued on May 18. “Mr. Young’s Affirmation and his Supplemental Affirmation are rife with conclusory and unsubstantiated statements that are insufficient to raise a question of fact.”

An auction was held in December 2024 by Starman Bros. Auctions that included the entire Luscombe Aircraft Corp. aircraft factory being sold as one package, including Type Certificate, STCs, jigs, shop equipment, tools, molds, new inventory, etc.,” according to General Aviation News. The website said the auction ended the plans of Steve Testrake and Stephen Young, who acquired the Luscombe assets in June 2019. They created the new company to manufacture parts for the Luscombe, as well as build new aircraft.

Luscombe acquired the rights to produce planes that resemble the former Legacy aircraft brand. According to an article by the Aircraft Owners and Pilots Association, there were about 1,600 registered Luscombe aircraft on the Federal Aviation Administration’s registry. Luscombe made two-seat, all-metal, tailwheel airplanes starting in the 1930s before stopping production in 1950. Luscombe planned to build two types of planes in Jamestown – a small general aviation aircraft and a sporty version of the same aircraft. Customers for the planes would include entry level pilots and flight schools, with a goal of making around 100 aircraft a year within five years after production started in Jamestown. Additionally, owners of the remaining 1,600 older Luscombe planes were to be able to have new parts made in Jamestown from the original Luscombe jigs.

County and STEDO officials said Luscombe Aircraft has defaulted on its $125,000 loan from the IDA as well as a $197,000 loan and use agreement that was part of Luscombe Aircraft’s financing package to open an office in the Jamestown airport. Collateral for the loan has been sold, but the IDA says it is still owed $265,455.98. The company also owes STEDO $290,222.95 of the $320,000 it borrowed.