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Sun, Apr 06, 2008

Reports: Buyer Agrees To Pay $10 Million For Adam Aircraft

Hearing On Sale Expected This Week

They may be down... but not necessarily out. Less than two months after Adam Aircraft Industries announced it would enter Chapter 7 liquidation, a possible buyer has emerged that might allow the A500 inline piston twin aircraft, and its A700 VLJ sibling, to return to the skies.

The Denver Post reports the trustee in the bankruptcy case agreed Saturday to sell Adam to an entity called AAI Acquisition for the sum of $10 million, plus settling up with some of the planemaker's other creditors. Paul Zarnowiecki at the Washington, DC-based law firm Orrick, Herrington & Sutcliffe LLP is listed as the contact person for the buyer.

As ANN reported, Adam Aircraft filed for liquidation February 19, eight days after the company shut down its operations in Denver and Pueblo, CO. Hints of significant problems at Adam came to light the month before, with the company's announcement of layoffs for close to 300 workers, and the suspension of operations in Pueblo and Ogden, UT.

At the time, the company cited the need to overcome past issues with the certification of its A700 very light jet, and obtain capital to see that program through to TC, as reasons for the decision.

Adam delivered about seven A500s to customers in 10 years of operations, and had pinned its hopes on the A700 -- which had attracted far more orders than the A500, including several from air taxi operators, and also shares several components with its piston-powered sibling.

A hearing on the sale is to occur Wednesday, the Post added. It is believed AAI Acquisition's bid was the only qualified one received; it's not known yet whether the new owner will hire former Adam workers.

FMI: www.adamaircraft.com, www.orrick.com

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