Lynn Tilton steps down as CEO of MD Helicopters | News

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Lynn Tilton has resigned as chief executive of MD Helicopters after a bankruptcy court ordered she sell the aircraft maker to pay off debts to its holding company Patriarch Partners.

Patriarch Partners has defaulted on $1.7 billion in loans owed to financier Zohar, according to a report published in The Wall Street Journal. Zohar sued the company to force it to sell its business, including MD Helicopters, to pay off the debt. MD Helicopters has confirmed Tilton’s resignation to FlightGlobal.

Facing a bankruptcy court order to sell businesses, Tilton reportedly walked away and abruptly resigned as CEO, according to attorneys for Zohar.

“Ms. Tilton dropped them on Saturday (March 21) without notice, Michael Nestor, attorney for Zohar, told the Log. Zohar’s attorneys did not respond to a request for comment.

MD Helicopters disputes the claim that Tilton abandoned the company. It says she resigned Monday, March 23, 2020. Patriarch Partners did not respond to a request for comment.

“Ms. Tilton only resigned after it became clear that the [Patriarch Partners] portfolio companies, including [MD Helicopters] is one, have been affected by the Zohar disputes, and the Zohars have refused to provide portfolio companies with adequate loan extensions,” explains MD Helicopters. “Ms. Tilton has agreed to cooperate reasonably with the Zohar Funds in transferring control of the portfolio companies. Contrary to the claims of the Zohar Funds, Ms. Tilton has at no time ‘abandoned’ the companies.

In addition to MD Helicopters, Patriarch Partners owned a mix of 21 industrial, software, cosmetics, housewares and lifestyle companies, including mapping firm Rand McNally and metals foundry Vulcan Engineering.

MD Helicopters says Tilton still holds stakes in these companies.

“Lynn remains in her position as director of MD Helicopters”, specifies the manufacturer. “In addition, Ms. Tilton remains a significant secured lender and shareholder of [MD Helicopters] and many portfolio companies, and continues to have rights in connection with those investments.

The company will be led by its “existing management team”, says MD Helicopters.

“Ms. Tilton has been working with the company’s leadership team to prepare for a smooth transition, including preparing for any business disruptions that may be caused by the COVID-19 crisis,” the company explains. .

MD Helicopters of Mesa, Arizona is a spin-off from Boeing’s 1997 merger with McDonnell Douglas. The company was originally founded by Howard Hughes and was part of Hughes Aircraft before being acquired by McDonnell Douglas in 1984.

The company manufactures light helicopters for the army, police and emergency services. Its armed MD 530 has been sold as a reconnaissance and light attack helicopter in Afghanistan, Kenya and Lebanon in recent years.

The single-engine MD 530 is based on the Vietnam War-era Hughes OH-6 Cayuse. Boeing manufactures a similar light attack, reconnaissance and utility helicopter for US Special Forces called the AH-6 Little Bird. This helicopter is also based on the OH-6.

MD Helicopters challenged Boeing’s right to sell the AH-6 Little Bird. The two companies had a long-standing legal dispute. Ultimately, MD Helicopters lost its case in an arbitration case decided in February 2020 in which it was ordered to pay Boeing $11.6 million.

Although it has lost its chief executive and is embroiled in a bankruptcy battle, MD Helicopters says it is a “viable, thriving and promising business”.

“MD fully executes all of its military and commercial contracts and supports global operations through its worldwide network of field service personnel and authorized sales, service and distribution partners,” the company states.

Update: Article amended March 27 to include comments from MD Helicopters.

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