CPI Aerostructures Files Suit Against Air Industries Group Seeking Specific Performance and Damages for Breach of Welding Me...
July 05 2018 - 5:48PM
CPI Aerostructures, Inc. (“CPI Aero®” or “the Company”) (NYSE
American:CVU) today announced that it has filed a complaint in the
Supreme Court of the State of New York, County of New York, seeking
specific performance and damages against Air Industries Group (“Air
Industries”). The complaint relates to a previously announced
agreement pursuant to which Air Industries agreed to sell its
Welding Metallurgy, Inc. (“WMI”) subsidiary to CPI Aero.
The complaint, among other things, alleges that Air Industries
willfully breached its contractual obligation to provide financial
information required to fulfill key conditions for closing under
the acquisition agreement. The complaint indicates that the
information Air Industries has supplied to CPI Aero is inadequate
to support a proper financial statement audit of WMI and that Air
Industries has otherwise refused to provide the required
information.
The complaint states that under the acquisition agreement, Air
Industries’ failure to perform its contractual obligations bars it
from exercising any claimed termination right. Nonetheless, and
notwithstanding CPI Aero’s objection, Air Industries sent a
termination notice. CPI Aero believes the termination notice is
ineffective because the failure of Air Industries to produce
financial information is a breach of the agreement and the reason a
closing cannot occur.
Douglas McCrosson, CPI Aero’s Chief Executive Officer, stated,
“Air Industries rejected CPI Aero’s offer to devote significant
resources to remediate Air Industries’ failure to provide inventory
data critical to our certified public accountants’ preparation of
closing financial statements. CPI Aero takes this action to compel
Air Industries to perform its obligations so the WMI transaction
can proceed to closing in accordance with the acquisition
agreement.”
The complaint also pursues damages to CPI Aero based on Air
Industries’ willful breach of the acquisition agreement.
About CPI Aero
CPI Aero is a U.S. manufacturer of structural assemblies for
fixed wing aircraft, helicopters and airborne Intelligence
Surveillance and Reconnaissance pod systems in both the commercial
aerospace and 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, 2017, and Form 10-Q for the three-month
period ended March 31, 2018.
CPI Aero® is a registered trademark of CPI Aerostructures,
Inc. For more information, visit www.cpiaero.com, and
follow us on Twitter @CPIAERO.
Contact: |
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Vincent Palazzolo |
Investor Relations
Counsel: |
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Chief Financial
Officer |
LHA Investor
Relations |
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CPI Aero |
Sanjay M. Hurry |
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(631) 586-5200 |
(212) 838-3777 |
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www.cpiaero.com |
cpiaero@lhai.com |
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www.lhai.com |
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