Benzinga | Dec 28, 2020 04:17PM EST

CPI Aerostructures Agrees To Settle Working Capital Dispute With Air Industries Group In Exchange For Payment Of $1,381,000 Remaining In Escrow To CPI Aero

EDGEWOOD, N.Y., Dec. 28, 2020 (GLOBE NEWSWIRE) -- CPI Aerostructures, Inc. ("CPI Aero(r)") (NYSE:CVU) announced it has reached an agreement ("Settlement Agreement") to resolve its post-closing working capital adjustment dispute with Air Industries Group ("Air Industries") (NYSE:AIRI) in exchange for payment of the $1,381,000 remaining in escrow to CPI Aero.



In December 2018, CPI Aero completed the acquisition of Welding Metallurgy, Inc. from Air Industries for a purchase price of $7.9 million subject to a potential post-closing working capital adjustment. Of the purchase price, $2 million was placed in escrow at closing. A dispute arose regarding the post-closing working capital adjustment which was presented to an expert accountant and subsequently became the subject of a motion filed by CPI Aero against Air Industries in the Supreme Court of the State of New York. CPI Aero sought a determination to enforce the expert's report and, among other things, a judgment against Air Industries in the amount of approximately $4.1 million.

In October 2019, Air Industries and CPI Aero jointly authorized the release to CPI Aero of approximately $619,000 from escrow representing the value of certain undisputed post-closing working capital adjustment items. On October 1, 2020, the Court denied CPI Aero's motion and Air Industries' cross-motion on procedural grounds. The Court made its decision without prejudice and did not resolve the post-closing working capital dispute.

Under the terms of the Settlement Agreement, the parties are jointly authorizing the release of the $1,381,000 balance from escrow to CPI Aero.