FAvS Reached A
Settlement Agreement With Piedmont Aviation Component Services
By Daniel Baxter
July 6, 2011 - First Aviation Services Inc. ("FAvS")
announced that it reached a Settlement Agreement and
Release ("Settlement") signed June 30, 2011 with
Piedmont Aviation Component Services, LLC ("Piedmont").
The former owner of FAvS' subsidiary Piedmont Propulsion
Systems, LLC ("PPS"), concluding all disputes between
the Company and Piedmont, including a dispute related to
a PPS power-by-the-hour contract with a major airline
(previously described in the Company's public
In connection with those disputes the Company in its 2010 financial statements recognized a $3,480 thousand accrued loss on the power-by-the-hour contract and decreased previously reported goodwill by $3,715 thousand.
to the Settlement, each party fully released the other party and
acknowledged that the settlement was a compromise of disputed
claims. Piedmont paid $1.4 million to FAvS in total as part of
the Settlement, a portion of which had been transferred at an
Simultaneously with the execution of the Settlement, Mr. Aaron
Hollander, C.E.O. and controlling stockholder of FAvS, purchased
3,322,259 shares of Class A Common Stock for $3 million, or
$.903 per share.
also agreed to extend through June 30, 2013 its guarantee of
FAvS' bank debt which was used to purchase FAvS' subsidiary
Aerospace Turbine Rotables, Inc. The amortization schedule for
such debt was revised so that no amortization will occur until
June 30, 2012, and after that date the debt will amortize
Rights Agreement between Piedmont and FAvS was amended limiting
Piedmont's right to approve certain material corporate actions
by FAvS. The 2009 Stockholders Agreement between Piedmont and
Mr. Hollander was also amended to delete the reciprocal drag
along rights and to provide that Piedmont may designate a single
member to the FAvS Board of Directors.
First Aviation Services Inc. ("FAvS") located in Westport, Connecticut, through its principal operating subsidiaries Aerospace Products International, Inc. ("API"), based in Memphis, TN, Aerospace Turbine Rotables, Inc. ("AeTR") in Wichita, KS, and Piedmont Propulsion Systems, LLC ("PPS") in Winston-Salem, NC, is a leading provider of services to the aviation industry worldwide.
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