One of the biggest employers in the P.E.I. aerospace industry is involved in several lawsuits that reach as far away as California and could be worth millions of dollars.
Summerside-based Testori Americas Corporation and Wiebel Aerospace are part of a series of lawsuits involving their parent company TMC Avion Inc., which bought them both in 2011.
The latest legal battles include a lawsuit and counter-lawsuit between TMC Avion and the former owners of the companies it purchased.
But they don’t end there, with TMC Avion and some of its affiliate companies launching legal action in California that includes allegations of racketeering involving six men and another company called Aviation Capital Partners, LLP.
One of the men involved in the case in California is in turn suing TMC Avion Inc. and several other companies, alleging he wasn’t paid for consultant work he was hired to do.
TMC Avion is seeking more than $14 million in damages from former Testori Americas, Testori Interiors and Wiebel Aerospace owners Lindo Lapegna, Paolo Testori, Francesco Uboldi and Aerorail Investments Holding.
In a statement of claim from August 2011, TMC Avion alleged the defendants provided incorrect financial information about their companies and overvalued the businesses prior to the sale.
TMC Avion also alleged the defendants have been interfering with the businesses and have wrongly asserted ownership over them.
The defendants denied the allegations and filed their own claim alleging TMC Avion was in breach of its purchase agreement.
Meanwhile, a lawsuit was filed with the United States District Court Central District of California in June 2012 against Scott Holland, Aviation Capital Partners, Patrick Ruppert, Howard Sanderson, Jeffry Conry, Wayne McElreath and George McConnaughey.
In that case, TMC Avion and several of its companies alleged the defendants were involved in a scheme to defraud the business of any benefit from its purchase of four companies that included Testori Americas.
TMC Avion alleged Holland and the other defendants colluded to siphon money out of the companies.
Ruppert, who is one of the defendants in the California lawsuit, is seeking more than $208,000 from TMC Avion and several other companies for consultant work he claimed he wasn’t paid for.
Along with the legal battles, Testori Americas and Wiebel Aerospace have fallen behind on their payments to the provincial government for money borrowed through various loans.
The two companies, which employ more than 150 people in P.E.I., have been borrowing from the provincial government since 2000 and owe a combined $13.2 million, including interest, through the P.E.I. Century 2000 Fund and Finance P.E.I.
A spokeswoman for the Innovation Department said the companies are behind on the loans.
Testori Americas also has three loans through the Atlantic Canada Opportunities Agency’s (ACOA) business development program. Those loans are worth $926,358 and a spokeswoman for ACOA said they are in good standing.
All of the defendants have denied the allegations against them in each case.
None of the allegations have been proven in court.