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Court Agrees to Hear
Infinity Aerospace's $41.7 Million Damage Claim By Jim Douglas |
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March 2, 2012 - Judge Melvin D. Sandvig of the Superior
Court of the State of California, County of Los Angeles,
has ruled (PC 051408) against a demurrer from TransDigm,
Inc. and Dukes Aerospace, Inc. and ordered a civil trial
of charges made against the two companies by Infinity
Aerospace, Aviation Design Group, The Dukes Group, and
Chet Huffman, alleging that the defendants committed
acts of fraud and misrepresentation and breaches of
contract, resulting in $41.7 million of damages.
TransDigm Group Incorporated develops, distributes and
manufactures commercial and military aerospace
components such as mechanical actuators and ignition
systems. TransDigm, and Dukes Aerospace, Inc. are
wholly-owned subsidiaries of TransDigm Group, an
international company based in Cleveland, Ohio, which
engineers, produces and supplies aircraft parts.
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The
plaintiffs allege that TransDigm, made misrepresentations about
how it would operate the businesses post acquisition and failed
to describe its poor relationship with the plaintiffs? key
customers and acquisition candidates and also did not disclose
TransDigm, Inc.?s intent to significantly raise prices and slash
costs post acquisition.
The
plaintiffs in the case allege that TransDigm?s, management also
made several enforceable promises in the asset purchase
agreement that they have not fulfilled ? including a promise to
retain specific key executives.
The
plaintiffs allege that the defendants? conduct post acquisition
made the earn-out payment impossible to achieve, including the
termination of key executives, the termination or inducement of
42 of 105 employees to quit or leave, the cancellation of
distribution agreements, the implementation of drastic price
increases and the closing of key facilities in Arizona and
Minnesota.
The plaintiffs are asking for compensatory damages of $41.7
million plus punitive damages, pre- and post-judgment
interest, and attorney?s fees. The plaintiffs are also
asking for an order requiring TransDigm. to release $10.5
million in funds held back from the sales price and to
comply with the earn-out provisions of the asset purchase
agreement.
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