September 26, 2018 – The Court hearing the NORDAM Group case (i) approved the Debtors’ settlement and global resolution with Gulfstream Aerospace Corporation (“GAC”) that resolves a longstanding dispute with respect to the Debtors’ production of “Nacelle Systems with Podding” for GAC’s G500 and G600 aircraft (the “PW800 Program”) and (ii) approved the Debtors’ asset purchase agreement with GAC (the”APA”) [Docket No. 362] . As previously reported [Docket No. 233], “As consideration for the sale of the Program Assets, GAC will (a) provide a full and irrevocable release of the Rejection Claim and (b) pay trade liabilities related to the PW800 Program, including payment of cure costs up to a cap of $18 million associated with certain purchase orders and executory contracts….Rejection of the LTPA is a critical component of the Global Resolution. First, the Debtors have concluded that the higher than anticipated costs of producing Nacelle Systems with Podding in its certified configuration will outweigh any revenues that the LTPA is likely to generate in the future, and is therefore not accretive to the Debtors’ business operations. Second, rejection of the LTPA avoids the incurrence of additional, unnecessary expenses related to the ongoing postpetition manufacturing phase of the PW800 Program under the LTPA. Finally, release of the Rejection Claim arising from the Debtors’ rejection of the LTPA is a material portion of the consideration that GAC will provide under the APA”
In a statement released by The NORDAM Group, CEO Meredith Siegfried Madden commented, “Suspending a customer’s program and impacting them, their customers, our stakeholders and supplier/partners is not something that should ever happen. This solution that we were able to quickly reach with Gulfstream will reduce the impact of the temporary suspension and allow all program activities to resume…This settlement agreement is the best outcome for everyone involved. Gulfstream gets to build its business jets; it allows NORDAM to continue under our family’s ownership and leadership; it secures our stakeholders’ and company’s future; and allows us to pay all of our suppliers, continuing our strong relationships with them.”
The Court order includes as attached Exhibit 1, a “Schedule of Assigned Contracts.”