U.S. defense and aerospace company, Lockheed Martin Corp. through its Canadian subsidiary, Lockheed Martin Canada Inc., has acquired the assets of the Engine Maintenance Division (commonly referred to as the EMC division) of Aveos Fleet Performance Inc. in Montreal through the Companies' Creditors and Arrangement Act (CCAA) for $40M. Aveos was spun off from Air Canada in 2007 as a stand-alone entity, and filed for CCAA protection in March, 2011. Aveos had a book value of $200M and annual pre-filing revenue of $300M.
The acquisition involved some unique aspects, including: (i) the appointment of an independent Chief Restructuring Officer who took over the operations and sales process of Aveos after the board of directors resigned following the CCAA filing; and (ii) the fact that the equipment and other major assets were sold to a third party auctioneer prior to Lockheed Martin entering negotiations, which required parallel asset purchase agreements with the auctioneer and Aveos.
Lockheed Martin has restarted operations at the Montreal EMC facility, focusing on the maintenance, repair and overhaul of aircraft engines. The transaction received favorable coverage in Quebec, particularly, as Lockheed Martin is expected to hire about 100 former Aveos workers, and to continue to expand its Canadian operations and presence.
Baker & McKenzie LLP represented Lockheed Martin with a team consisting of Chris Besant, Frank Spizzirri, Lydia Salvi and Shaheen Karolia (restructuring); Kent Beattie (real estate); Lisa Stam (employment); Donna Walwyn (pensions); Arlan Gates (competition); Brian Segal and Kristy Balkwill (tax); Paul Burns and Brian Cacic (trade and export control); Jonathan Cocker (environmental); Stephanie Vaccari (intellectual property); Denis Chamberland (government grants) and Ken Jull and Christopher Burkett (Canadian practices and compliance).
Aveos was represented by Fraser Milner Casgrain LLP (now Dentons Canada LLP), with a team that included Roger Simard (restructuring, bankruptcy and insolvency); Yan Besner (real estate); John Papagiannis (corporate & commercial); Rachael Golem (corporate & commercial) and Ari Sorek (restructuring, bankruptcy and insolvency).
FTI Consulting Canada Inc. acted as the Court-appointed Monitor for Aveos. Norton Rose Canada LLP acted as counsel to the Court-appointed Monitor and was led by Sylvian Riguard (restructuring, bankruptcy and insolvency).
Kugler Kandestin LLP acted as counsel for Maynards Industries Ltd., the auctioneer of certain EMC assets, and was led by Michael Gaon (corporate and commercial).