0000001750 false Common Stock, $1.00 par value AIR 0000001750 2023-09-19 2023-09-19 0000001750 us-gaap:CommonStockMember exch:XCHI 2023-09-19 2023-09-19 0000001750 us-gaap:CommonStockMember exch:XNYS 2023-09-19 2023-09-19 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
   

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): September 19, 2023

 

AAR CORP.

(Exact name of registrant as specified in its charter)

 

Delaware   1-6263   36-2334820
(State of Incorporation)   (Commission File Number)   (IRS Employer Identification No.)

 

One AAR Place

1100 N. Wood Dale Road

Wood Dale, Illinois 60191

(Address and Zip Code of Principal Executive Offices)

 

Registrant’s telephone number, including area code: (630) 227-2000

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class   Trading Symbol(s)   Name of Each Exchange on Which Registered
Common Stock, $1.00 par value   AIR   New York Stock Exchange
    Chicago Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule  405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 8.01. Other Events.

 

Russian Bankruptcy Litigation

 

During calendar years 2016 and 2017, certain of the subsidiaries of AAR CORP. (the “Company”) purchased four engines from VIM-AVIA Airlines, LLC (“VIM-AVIA”), a company organized in Russia. Subsequent to the purchase of the engines, VIM-AVIA declared bankruptcy in Russian courts, and shortly thereafter the receiver of the VIM-AVIA bankruptcy estate and one of the major creditors of VIM-AVIA filed a claw-back action in the Arbitration Court of the Russian Republic of Tartarstan (the “Russian Trial Court”) against our subsidiaries alleging that the contracts entered into with VIM-AVIA in the 2016-2017 timeframe are invalid. The clawback action alleged that our subsidiaries owe the VIM-AVIA bankruptcy estate approximately $13 million, the alleged fair market value of the four engines at the time of sale. In March 2023, the Russian Trial Court awarded a $1.8 million judgment against the Company relating to one engine, and dismissed all the other claims against the Company relating to the three remaining engines. The Company recognized a corresponding charge of $1.8 million in the third quarter of Fiscal 2023. The Company thereafter appealed the $1.8 million judgment entered against it by the Russian Trial Court. The receiver and the creditor thereafter appealed to the Russian Trial Court’s judgment dismissing their claims relating to the remaining three engines.

 

On September 19, 2023, the Russian Eleventh Arbitration Court of Appeal (the “Russian Appellate Court”) announced its decision to issue an order (i) affirming the Russian Trial Court's adverse judgment against the Company relating to one of the four engines; (ii) reversing the Russian Trial Court's dismissal of the claims relating to the remaining three engines; and (iii) awarding a judgment against the Company in the total amount of $13.0 million. The Company strongly disputes the validity of the judgment announced by the Russian Appellate Court and continues to strongly dispute all claims asserted in the clawback action.  The Company may seek further appellate review in the Russian courts. During the first quarter of fiscal 2024, the Company recognized a charge for $11.2 million representing the judgment against the Company for the remaining three engines.

 

The Company believes that the judgment announced by the Russian Appellate Court is a result of, among other things, a hostile business and legal environment for foreign companies in Russia, which has been caused by developments in the Russia/Ukraine conflict, including the imposition of a range of sanctions and export controls on Russian entities and individuals by the U.S. and its North Atlantic Treaty Organization allies.  Given the Company's obligation to comply with U.S. trade restrictions likely applicable to undisclosed creditors of the VIM-AVIA bankruptcy estate, the Company's ability to satisfy any portion of the Russian judgment or to otherwise settle the receiver's claims may be restricted and is unknown. Although there can be no assurances, the Company believes it will have strong defenses to any attempt that may be made to recognize and enforce the adverse judgment announced by the Russian Appellate Court outside of Russia. As of August 31, 2023, the Company’s Condensed Consolidated Balance Sheet included a total liability for the matter of $13.0 million classified as long-term in Other liabilities.

 

Forward-Looking Statements

 

This report contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995, which reflect management’s expectations about future conditions, including challenges and uncertainties related to the outcome of the Russian bankruptcy litigation. Forward-looking statements may also be identified because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms. These forward-looking statements are based on beliefs of Company management, as well as assumptions and estimates based on information currently available to the Company and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. For a discussion of these and other risks and uncertainties, refer to “Risk Factors” in our most recent Annual Report on Form 10-K. Should one or more of these risks or uncertainties materialize adversely, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described. These events and uncertainties are difficult or impossible to predict accurately and many are beyond the Company’s control. The Company assumes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

 

3

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date:     September 22, 2023

 

  AAR CORP.
     
  By: /s/ Jessica A. Garascia
    Jessica A. Garascia
    Senior Vice President, General Counsel, Chief Administrative Officer and Secretary

 

4

 

v3.23.3
Cover
Sep. 19, 2023
Document Information [Line Items]  
Document Type 8-K
Amendment Flag false
Document Period End Date Sep. 19, 2023
Entity File Number 1-6263
Entity Registrant Name AAR CORP.
Entity Central Index Key 0000001750
Entity Tax Identification Number 36-2334820
Entity Incorporation, State or Country Code DE
Entity Address, Address Line One One AAR Place
Entity Address, Address Line Two 1100 N. Wood Dale Road
Entity Address, City or Town Wood Dale
Entity Address, State or Province IL
Entity Address, Postal Zip Code 60191
City Area Code 630
Local Phone Number 227-2000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Common Stock [Member] | NYSE CHICAGO, INC. [Member]  
Document Information [Line Items]  
Title of 12(b) Security Common Stock, $1.00 par value
Trading Symbol AIR
Security Exchange Name CHX
Common Stock [Member] | NEW YORK STOCK EXCHANGE, INC. [Member]  
Document Information [Line Items]  
Title of 12(b) Security Common Stock, $1.00 par value
Trading Symbol AIR
Security Exchange Name NYSE

AAR (NYSE:AIR)
Historical Stock Chart
From Jan 2024 to Feb 2024 Click Here for more AAR Charts.
AAR (NYSE:AIR)
Historical Stock Chart
From Mar 2023 to Feb 2024 Click Here for more AAR Charts.