Avcorp says it’s due money from Cessna to settle parts dispute

09/06/2013 10:24 AM

08/08/2014 10:18 AM

Cessna Aircraft is required to pay Canadian supplier Avcorp $27.96 million in a settlement agreement reached by the two sides, Avcorp said Friday.

Cessna’s funds to satisfy the judgment are due to the company Friday, it said.

Cessna officials had no immediate response to the statement from Avcorp.

In June, Cessna had filed an appeal with the U.S. Court of Appeals for the Tenth Circuit after a U.S. District judge upheld the award. Cessna had disputed the award to Avcorp, made during arbitration last year.

Avcorp had alleged that Cessna breached an exclusivity agreement after it bought components from other sources.

Cessna alleged the contract between the parties had never been a “sole source” agreement or exclusive and that Avcorp had breached the contract by shipping defective parts and that deliveries were late most of the time.

Beginning in 2001, Avcorp built major structural aircraft components, such as wing spars, center wing boxes and tails for various Cessna airplane models.

In 2003, Cessna began buying Sovereign empennages, or tails, from both Avcorp and Fokker. That continued for six years.

In 2005, Cessna also began building the center wing box for the Citation CJ3.

In late 2010, Cessna advised Avcorp that it would begin to transition to other suppliers and would begin to build some of the goods in-house.

Avcorp initiated arbitration against Cessna.

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