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Welding Metallurgy sale to CPI Aerostructures hits another snag

CPI Aerostructures' headquarters in Edgewood.

CPI Aerostructures' headquarters in Edgewood.  Photo Credit: Google Maps

Two Long Island aerospace manufacturers have reignited a long-running legal battle over the sale of a subsidiary.

CPI Aerostructures Inc. has filed a new motion under a 2018 lawsuit that calls for Air Industries Group Inc. to turn over millions of dollars to cover a working capital deficit, effectively cutting the price for its Welding Metallurgy Inc. subsidiary.

The companies first announced in March 2018 a deal under which Air Industries Group Inc. would sell Hauppauge-based Welding Metallurgy to CPI for about $9 million.

By July of that year, CPI had filed a lawsuit in State Supreme Court in Manhattan charging that Air Industries had failed to abide by its contract and supply information, including inventory data, that would allow it to complete the transaction.

In October 2018, under a court-ordered stipulation, Bay Shore-based Air Industries Group agreed to go forward with the sale, which called for Welding Metallurgy's roughly 60 workers to move into CPI's 171,000-square-foot manufacturing and administration facility in Edgewood.

Though CPI announced that the sale had closed in December, differences remained related to post-sale financial adjustments.

"We said it was one amount and they said it was another," said Air Industries chief financial officer Michael Recca.

That prompted CPI to file a motion under the earlier state Supreme Court lawsuit, which had remained open.

Vincent Palazzolo, CPI's chief financial officer, said the accounting conflicts could amount to a swing worth about $4 million in the final purchase price.

"Our number was significantly different from their number," he said.

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