Arbitration Panel Rules In Favor Of The Smaller Company

An arbitration panel in Phoenix, AZ has ruled that Boeing cannot block MD Helicopters, owned by Lynn Tilton's Patriarch Partners, from competing in the U.S. Army's Armed Aerial Scout program.

The dispute grew out of a contractual agreement between MD Helicopters and Boeing in 2005. Using that agreement, Boeing tried to shut down sales of the MD540F helicopter, and even suggested at one point that the smaller company could not sell any "similarly configured" aircraft to any military organization, domestic or foreign.

The Wall Street Journal reports that the contract was part of a joint effort in 2004 on the parts of MD Helicopters and Boeing to win a contract for a "Mission Enhanced Little Bird" that would have been a replacement for Vietnam-era helicopters. The Army eventually abandoned the program. When Tilton and MD Helicopters announced plans to bid for a new Army contract using the MD540F platform, the larger company cried "foul," and the dispute eventually ended in arbitration.

MD Helicopters filed court documents Thursday indicating that the arbitration ruling allows them to compete for the AAS program. The contract is potentially worth billions of dollars to the successful company.

"I'm gratified by the decision and look forward to continuing the collaboration between MD Helicopters and the Department of Defense as we continue developing state-of-the-art aircraft," Tilton said in a statement e-mailed to ANN.

FMI: www.mdhelicopters.com