CPI Aerostructures and Air Industries Group Agree to Settle Working Capital Dispute
December 28 2020 - 4:15PM
CPI Aerostructures, Inc. (“CPI Aero®”) (NYSE American: CVU)
announced it has reached an agreement (“Settlement Agreement”) to
resolve its post-closing working capital adjustment dispute with
Air Industries Group (“Air Industries”) (NYSE American: AIRI) in
exchange for payment of the $1,381,000 remaining in escrow to CPI
Aero.
In December 2018, CPI Aero completed the
acquisition of Welding Metallurgy, Inc. from Air Industries for a
purchase price of $7.9 million subject to a potential post-closing
working capital adjustment. Of the purchase price, $2 million was
placed in escrow at closing. A dispute arose regarding the
post-closing working capital adjustment which was presented to an
expert accountant and subsequently became the subject of a motion
filed by CPI Aero against Air Industries in the Supreme Court of
the State of New York. CPI Aero sought a determination to enforce
the expert’s report and, among other things, a judgment against Air
Industries in the amount of approximately $4.1 million.
In October 2019, Air Industries and CPI Aero
jointly authorized the release to CPI Aero of approximately
$619,000 from escrow representing the value of certain undisputed
post-closing working capital adjustment items. On October 1, 2020,
the Court denied CPI Aero’s motion and Air Industries’ cross-motion
on procedural grounds. The Court made its decision without
prejudice and did not resolve the post-closing working capital
dispute.
Under the terms of the Settlement Agreement, the
parties are jointly authorizing the release of the $1,381,000
balance from escrow to CPI Aero.
About CPI Aero
CPI Aero is a U.S. manufacturer of structural
assemblies for fixed wing aircraft, helicopters and airborne
Intelligence Surveillance and Reconnaissance and Electronic Warfare
pod systems, primarily for national security markets. Within the
global aerostructure supply chain, CPI Aero is either a Tier 1
supplier to aircraft OEMs or a Tier 2 subcontractor to major Tier 1
manufacturers. CPI also is a prime contractor to the U.S.
Department of Defense, primarily the Air Force. In conjunction with
its assembly operations, CPI Aero provides engineering, program
management, supply chain management, and MRO services. CPI Aero is
included in the Russell Microcap® Index.
The above statements include forward looking
statements that involve risks and uncertainties, which are
described from time to time in CPI Aero's SEC reports, including
CPI Aero's Form 10-K for the year ended December 31, 2019 and Form
10-Q for the three-month period ended March 31, 2020 and June 30,
2020.
CPI Aero® is a registered trademark of CPI Aerostructures, Inc.
For more information, visit www.cpiaero.com, and follow us on
Twitter @CPIAERO.
Contact:Investor Relations Counsel:LHA Investor
RelationsJody Burfening(212)
838-3777cpiaero@lhai.comwww.lhai.com
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