Lawsuits cost fledgling Renaissance Aircraft money, clients

Sunday, September 30, 2001

The legal wranglings involving Renaissance Aircraft have not stopped the new Cape Girardeau company from beginning operations, but president John Dearden said they have impeded the process.

"If it didn't have the effect of slowing us down, they would have just been an aggravation," Dearden said last week. "But by slowing us down, it cost us money and it cost us clients."

There has been no decision yet on the Georgia-based lawsuit brought against Renaissance over ownership of equipment it needs to build the Luscombe 8F, a 1930s-style two-seat, recreational plane.

The litigants, the Don Luscombe Aviation History Foundation, claims Renaissance wrongly took $8 million in equipment -- machinery, tooling jigs and dies -- needed to build the plane when it relocated here from Eastman, Ga.

Renaissance has countersued the foundation, which holds the certification for the Luscombe 8F and gave exclusive rights to Renaissance to build and sell the plane. The countersuit, in which Renaissance is seeking compensation for money lost in delays, is still in arbitration in Arizona, where the foundation is based.

"For us, it's not about whether or not we'll get any money, it's how much," Dearden said.

Representatives of the Luscombe Foundation say they are just as confident.

"We think we've got a pretty good case," said foundation president Doug Combs. "We wouldn't be spending tens of thousands of dollars if we thought we didn't."

Work begins

Workers began construction on five of the $70,000 planes in Cape Girardeau, but Renaissance isn't able to build them as quickly as they'd like because their facilities haven't been built yet, Dearden said.

That also means they haven't been able to hire more people, eventually as many as 200, to begin producing what he hopes will be 250-500 planes a year.

Dearden believes that the delays, in part, took place because the city only recently sold $2.8 million in bonds and hasn't even sent out a request for proposals for the construction of a $1.6 million, 60,000-square-foot building on airport property. These are all things the city promised Renaissance last year if it agreed to relocate here.

In the meantime, Renaissance is operating out of four buildings instead of one, which obviously slows the process, Dearden said.

"Instead of going from station to station, we have to go from building to building, and, of course that slows us down," he said. "We've basically been trying to build planes out of a highly inefficient bunker."

He points to the fact that the building was expected to be complete by now and that bonds were only sold within the last two weeks, though they could have been issued much earlier.

"We were concerned that things were moving a little too slowly," Dearden said. "We were frustrated with the city and the state about how long things have taken. But things seemed to have picked up now. It looks like we're back on track."

An example of the slow pace: The city had to remove an engineering contract for the facility from the Cape Girardeau City Council meeting agenda Sept. 17. Cape Girardeau Regional Airport manager Bruce Loy said they were waiting for the Missouri Department of Economic Development to approve an Action Fund loan, which provides money for certain types of for-profit companies that need start-up or expansion money.

"I think city hall's concerns have been that it would be tough for us to move ahead until we knew they were going to get that state loan," Loy said.

Loy said the state was waiting on additional information regarding the status of the lawsuits. He added that the item has been replaced on the city council's agenda for Monday night as well.

"The state is now comfortable, and I think we're comfortable, too," Loy said. "But this project couldn't go anywhere until we got confirmation from the state. We needed to make sure."

The city hopes to speed things up by streamlining the engineering process, Loy said. They plan to modify normal procedures by allowing the building to go up first and letting interior work be done after the exterior is complete -- instead of the work being done simultaneously, which takes longer.

"They wanted to get the shell up before the real hard winter hit," Loy said.

Dearden said he hopes the company is under roof by February.

Foundation's case

The case that is slowing progress hinges on the sale of the equipment needed to make the Luscombe. The Don Luscombe Aviation History Foundation's Georgia lawyer, Peter Lown, said Renaissance moved the equipment needed to produce the plane from storage in Michigan. Lown claimed Renaissance purchased the equipment from a man who had already sold it to the foundation.

"Basically the guy sold it twice," Lown said. "So Renaissance believes it has a valid claim to the parts and so do we. I don't mean in any way to vilify Renaissance. It's one of those lawsuits where both sides have arguable claims. We just happen to believe ours is the right one."

Dearden said he hopes the matter is settled quickly, but Lown thinks it could drag out for up to a year.

Dearden also said that the foundation was ordered to pay Renaissance $5,000 after a Dodge County, Ga., judge found the foundation in contempt in court.

Lown had no comment on Dearden's claim.

Dearden said the judge ruled that there was enough information to link the foundation to anonymously mailed envelopes containing copies of court documents and correspondence sent to the Southeast Missourian, the Cape Girardeau city manager's office, Loy's office and the Missouri Department of Economic Development.

"There's been a gag order, so I can't get into it too much," Dearden said. "But to me, the arbitration is a foregone conclusion and their suit against us has become so weak, I'm surprised they're still pursuing it."

335-6611, extension 137

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