Judge gives green light for Aveos sale
By The Canadian Press
Aug. 27, 2012, Montreal - A Quebec Superior Court judge has approved the sale of Aveos' engine repair business to Lufthansa Technik.
By The Canadian Press
The court documents released late Friday also say the deal between the now defunct aircraft maintenance business and the German company has closed. The deal had been contested by rival bidder MTU Aero Engines, which said the process was unfair.
"The court is of the opinion that the divestiture process … was implemented with transparency, integrity and efficacy and that
the whole process was fair toward MTU,'' wrote justice Louis Gouin in a ruling.
"The opposite decision, would, inevitably be unfair to Lufthansa.''
Rival bidder MTU had argued in court earlier this week that Lufthansa's latest bid, which trumped its own offer, shouldn't have
been allowed because it was submitted after a deadline.
Technik tripled its original bid for the Aveos engine repair business during negotiations to sell the operation.
The move enabled the German company to best MTU Aero Engines with an offer that was more than twice what the Vancouver-based company offered to pay.
MTU's lawyer grilled Aveos chief restructuring officer Jonathan Solursh about the bidding process, arguing his client's bid should have won because it was higher by the Aug. 7 deadline, before Lufthansa twice increased its offer.
The union representing former Aveos employees was also trying to block the sale of the engine repair business to Lufthansa. At stake are potentially more than 130 jobs in Montreal and Vancouver, mostly those of former Aveos workers.
The value of the winning bid hasn't been disclosed but MTU offered $5.2 million including $4 million plus specialized tools.
MTU valued the tools at $1.2 million, but the chief restructuring officer testified the amount was less than the liquidation price.
The company had been Air Canada's main provider of aircraft overhauls and heavy maintenance.
The engine repair business is the last part of the Aveos business to be sold. Last week, the court approved the sale of the component repair business to British-based firm A J Walter Aviation for an undisclosed sum. The company plans to create about 200 jobs.
Earlier, its airframe business and other assets were sold for $10.8 million to three Canadian firms, two U.S.-based companies and one liquidator.
The buyers of the airframe business include Avianor Inc. based in Mirabel, Que., Avmax Aviation Services Inc. of Calgary and Discovery Air Technical, a subsidiary of Yellowknife-based Discovery Air.
Premier Aviation Overhaul Center of New York, which has an operation in Trois-Rivieres, Que., and Illinois-based Aircraft
Services Inc. also acquired parts of the business.
Liquidator Maynards Industries Ltd. bought several lots of equipment that are being sold at auction.
The court had delayed a decision on the Lufthansa Technik deal to give opponents an opportunity to challenge the fairness of the proposed transaction.
Aveos terminated about 2,600 jobs across the country, including some 1,800 in Montreal, when it suddenly obtained creditor
protection and closed its operations in March.
The judge granted the request for a delay after Air Canada agreed to extend the deadline for its contract with the winning bidder beyond its Aug. 15 deadline to meet its engine maintenance needs for the fall season.