Legal Battle Between Cirrus and L-3 Heats Up

 - March 25, 2010, 11:43 AM

Cirrus Design has filed a lawsuit against L-3 Avionics Systems aimed at stopping the spread of scuttlebutt that Cirrus is teetering on the edge of bankruptcy. L-3 Avionics sued Cirrus for $21.7 million last year after a deal for cockpit systems fell apart. Cirrus’ suit against L-3 alleges that the Grand Rapids, Mich. avionics maker has been warning other suppliers that Cirrus’s controlling shareholder and largest creditor, Arcapita, plans to seek bankruptcy protection for the Minnesota airplane maker. “If suppliers stop their flow of inventory and goods to Cirrus based on the false statements made, Cirrus will be unable to meet its production requirements, will not be able to deliver aircraft to its customers, and will be forced to lay off hundreds of employees,” Cirrus said in its complaint. In a statement last week to suppliers, customers and employees, Cirrus president and CEO Brent Wouters said the market for piston airplanes appears to be strengthening. “We are seeing solid signs that suggest this year could be better–potentially much better–than many are thinking,” he said. “Our first-quarter sales are on pace with the results for Q1 2008, a year in which we delivered 550 new airplanes.” A spokeswoman for L-3 Avionics said the company does not respond to questions about legal matters. Calls to Cirrus were not returned.