Canadian Manufacturing

Aveos sale to Lufthansa Technik faces court challenge

Approval was delayed a week to give the sale opponents an opportunity to challenge the fairness of the proposed transaction.



MONTREAL—The proposed liquidation sale of Aveos’ engine repair business to Germany’s Lufthansa Technik faces a challenge in a Quebec court today.

The union representing former employees of the insolvent Montreal-based aircraft maintenance company and losing bidder MTU Aero Engines are trying to block the sale recommended by the court-appointed monitor.

Approval was delayed a week to give the sale opponents an opportunity to challenge the fairness of the proposed transaction.

Both challenged the transparency and fairness of the sales process and the veracity of the report submitted to the court by the chief restructuring officer.

At stake are potentially more than 130 jobs in Montreal and Vancouver, mostly those of former Aveos workers.

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 company had been Air Canada’s main provider of aircraft overhauls and heavy maintenance.

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.

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