Avcorp awarded $27.4 million US in arbitration
November 19, 2012
VANCOUVER: Avcorp Industries Inc. (TSX: AVP) (the “Company” or “Avcorp”) is pleased to
report that it has received the determination of an appointed arbitration panel constituted to
adjudicate outstanding issues relating to cost reimbursements and compensation payable to
Avcorp in connection with the transition of Cessna Aircraft Company (“Cessna”) production
work back to Cessna and other suppliers. The transition of Cessna production work was first
announced by the Company on December 17, 2010 and immediately following notification by
Cessna, the Company had attempted to negotiate compensation payments as contemplated by
the Cessna Strategic Alliance Agreement (the “SAA”). Only when negotiations and mediation
were unsuccessful did the Company refer the matter to binding arbitration.
The binding arbitration award, delivered to the Company on November 16, 2012, determined
that: the SAA was an exclusive agreement between Cessna and Avcorp; Cessna could not
unilaterally transition production work from Avcorp; Avcorp had fulfilled the requirements of
the SAA; and, Avcorp suffered damages as a result of Cessna transitioning production work from
Avcorp. In addition, all counterclaims that were advanced by Cessna were denied. The quantum
of damages was assessed by the arbitration panel at USD 27,391,372, which amount is payable
to Avcorp within 30 days of the arbitration award.
Avcorp designs and builds major airframe structures for some of the world’s leading aircraft companies, including BAE Systems, Boeing, and Bombardier. With more than 50 years of experience, over 400 skilled employees and 354,000 square feet of facilities in Delta BC and Burlington ON, Avcorp offers integrated composite and metallic aircraft structures to aircraft manufacturers, a distinct advantage in the pursuit of contracts for new aircraft designs, which require lower‐cost, light weight, strong, reliable structures. Our Burlington location also offers composite repairs for commercial aircraft. Avcorp is a Canadian public company traded on the Toronto Stock Exchange (TSX:AVP).
Sandi DiPrimo, Investor Relations Contact | 604-587-4938