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Wednesday, November 14, 2007

Eclipse Is Sued By Supplier

By Andrew Webb
Copyright © 2007 Albuquerque Journal; Journal Staff Writer
    Eclipse Aviation took another hit Tuesday, this time from a U.K.-based company building tail sections for the Eclipse 500 jet.
    Hampson Aerospace sued the Albuquerque jet maker, alleging failure to make required payments.
    The tail sections are being built at Hampson's plant in Grand Prairie, Texas, and shipped to Eclipse Aviation in Albuquerque for mating to the rest of the six-seat jet's fuselage.
    A spokeswoman for Eclipse Aviation, reached late Tuesday, said she couldn't comment on the pending litigation.
    It was unclear Tuesday whether Hampson was still supplying tail sections to Eclipse, which has changed other key suppliers in recent years, including the companies that were building the original engine and avionics system.
    Eclipse has been unable to meet projected production rates, forcing it to lay off 100 temporary workers last month.
    And last week, an aviation analyst said the company would need to seek another round of investor financing to make it through the year. Eclipse has denied that the company needs more cash to survive the year.
    The lawsuit, filed Tuesday in state District Court in Albuquerque, alleges that Eclipse made a required first payment in March but failed to make further payments called for under their agreement.
    After several meetings, Hampson agreed to reduce required payments, the lawsuit says. Eclipse then said it was entitled to rescind the agreement on the basis of fraud.
    The lawsuit did not detail the fraud alleged by Eclipse, and the amount of the disputed payments wasn't included.
    Hampson's attorneys said in documents that they planned to request court permission to file the original agreement between the two companies under seal.
    When the contract was announced in 2003, it had an estimated value of $380 million.
    In its suit, Hampson seeks court enforcement of the agreement and unspecified damages.
    Eclipse has been plagued in the past year by problems, including slower-than-expected production and problems with some components that will require retrofitting of already-delivered aircraft.
    Eclipse, which has said it expects to transform the aviation industry with its low-cost jet, has raised an estimated $1 billion from investors.
    The state holds $19 million in equity investments in the company.