Case 3:08-cv-01958-CFD Document 1 Filed 12/29/08 Page 1 of 12

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UNITED STATES DI~irutT COURT
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-------------------------------------------------------------- )(

AVIAMA)( AVIATION LTD., CIVIL ACnONNO. 3: O~CV I q 5!(C.F6,)

Plaintiff,

vs. DECEMBER 23, 2008

BOMBARDIER AEROSPACE CORPORAnON

Defendant.
-------------------------------------------------------------- )(

COMPLAINT

Plaintiff, Aviamax Aviation Ltd., by its attorneys, Gilbride, Tusa, Last & Spellane, as and for its

Complaint ("Complaint"), alleges as follows:

1. Plaintiff, Aviamax Aviation Ltd. ("Aviamax"), is a corporation duly organized under the

laws of the Cayman Islands with its principal place of business located at Boundary Hall, Cricket Square,

P.O. Box 1111, Grand Cayman, KY1-1102, Cayman Islands.

2. Upon information and belief, Defendant, Bombardier Aerospace Corporation

("Bombardier"), is a corporation organized under the laws of the State of Delaware, with its principal place

of business located at 3400 Waterview Parkway, Suite 400, Richardson, Texas 75080.

3. Bombardier is licensed and duly authorized to conduct business in the State of Connecticut,

maintains a facility in Windsor Locks, Connecticut and delivers many of the aircraft that it builds to

Connecticut as well as conducting other significant business in the State of Connecticut.

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4. This Court has jurisdiction over the controversy pursuant to 28 U.S.C. §1332(a)(2) in that

the matter in controversy exceeds $75,000 exclusive of interests and costs and is between citizens of a state

and a citizen or subjects of a foreign state.

5. Venue lies in this district pursuant to 28 U.S.C. §1391(a).

AS AND FOR A FIRST CLAIM FOR RELIEF

6. Aviamax repeats and realleges each and every allegation contained in paragraphs 1 through

5 of the Complaint as if set forth in full hereat.

7. A viamax is a company which specializes in aviation.

8. By aircraft purchase agreement dated January 30, 2006 ("Agreement") between Aviamax

GmbH ("GmbH") and Bombardier, GmbH agreed to purchase a Bombardier Challenger aircraft, model

CL-600, Variant 605, serial number 5716 ("Aircraft"), for $25,850,000.00 with delivery of the completed

Aircraft to be made on or before October 31, 2007 at Bombardier's facilities in Windsor Locks,

Connecticut.

9. On or about March 20, 2007, the Agreement was assigned to Aviamax from GmbH with

Bombardier's knowledge and express consent.

10. Although Bombardier contracted pursuant to the Agreement to deliver a completed Aircraft,

the Agreement provided that the outfitting of the Aircraft was to be subcontracted by Bombardier to

Midcoast Aviation Inc. ("Midcoast").

11. Bombardier represented that both Bombardier's own staff and Midcoast had the required

certifications and expertise to outfit the Aircraft, and that Midcoast could perform the work in the same

time frame as Bombardier.

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12. Based on Bombardier's representations and assurances as to Midcoast's then current

abilities, Aviamax agreed to permit Bombardier to subcontract with Midcoast for the outfitting of the

Aircraft.

13. In or around March, 2007, Aviamax entered into an agreement with GE Capital Solutions

GmbH & Co., KG ("GE") to finance the purchase of the Aircraft, whereby Aviamax's rights under the

Agreement as purchaser of the Aircraft were transferred to GE, in return for GE financing the purchase of

the Aircraft ("GE Contract"). The GE Contract provided for a lease back of the Aircraft to Aviamax upon

delivery.

14. Pursuant to the terms of the GE Contract, all the rights and claims against Bombardier with

respect to the Aircraft and the Agreement were assigned by GE to Aviamax.

15. In February, 2007, Aviamax was informed by Bombardier that the allocated aircraft shall

bear the Serial Number 5713 and subsequently asked Bombardier for a different serial number which

Bombardier complied with by assigning Serial Number 5716. As a result of this change, Bombardier told

Aviamax that delivery would be delayed but only until November 29, 2007. Amendment No.2 to the

Agreement between Aviamax and Bombardier, dated as of February 27, 2007 amended the Agreement to

provide for the change in delivery date.

16. Bombardier timely completed the shell and operating systems of the Aircraft and, in or

around May 2007, the Aircraft was delivered by Bombardier in "green" condition to GE and GE acquired

ownership of the Aircraft, subject to the GE Contract. It was then delivered by Bombardier to Midcoast for

completion in accordance with the terms of the Agreement. A "green" aircraft is one where the aircraft

shell and operating systems are completed so that it can fly, but the aircraft still requires exterior painting,

work on its interior, and outfitting with the particular equipment and furnishings requested by the buyer.

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17. Prior to green delivery, Aviamax paid to Bombardier $7,500,000.00 pursuant to the

Agreement.

18. Upon delivery of the Aircraft in green condition and the payment of an additional

$15,000,000.00 to Bombardier, the ownership of the Aircraft was transferred to Continental Aircraft Trust

No. 1006, a Cayman Islands Trust, beneficially owned by GE.

19. Such ownership transfer was registered with the Federal Aviation Administration ("FAA").

20. On or about July 5, 2007, Aviamax entered into a contract to sell the Aircraft to Ranch

Assets Holding Ltd. ("Ranch") for $29,260,000.00 plus interest payments in the amount of$160,000.00 per

month through the day of delivery of the Aircraft ("Resale Contract").

21. Thereafter, Bombardier and Midcoast failed to meet the revised delivery date and the

delivery date was changed to December 20, 2007.

22. Bombardier and Midcoast both knew of the Resale Contract based upon the written

authorization provided to them for Ranch's agents to be able to inspect the Aircraft and due to Ranch's

employees regular attendance at Midcoast's facility in St. Louis, Missouri where Midcoast was completing

the green Aircraft and where Bombardier maintained employees.

23. In January, 2008, Bombardier notified Aviamax that delivery of the Aircraft would be

further delayed until July or August, 2008. At this time, Aviamax discovered what Bombardier already

knew but had concealed from Aviamax, specifically that Midcoast was not duly certified by the FAA and

had not obtained the required approvals and supplemental type certificates ("STC") from the FAA to outfit

the Aircraft or any other Bombardier Challenger 605. Without these approvals and certifications, Midcoast

could not complete the Aircraft.

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24. Prior to entering into the Third Amendment to the Agreement ("Third Amendment") on

April 25, 2008, which provided for delivery no later than August 2008, Aviamax asked Bombardier to take

the Aircraft back to its Montreal facility for completion of the work so that timely delivery of the

completed Aircraft at Windsor Locks, Connecticut could be assured.

25. Upon information and belief, at the time, Bombardier knew that Midcoast also did not have

a sufficient work force to do the required work on the Aircraft and the other aircrafts subcontracted by

Bombardier to Midcoast for outfitting.

26. Bombardier rejected Aviamax's request to move the Aircraft to Bombardier's facility for

completion, and advised Aviamax that Midcoast could do the work faster than Bombardier and would

complete the work no later than August 2008, even though Bombardier knew at the time of this

representation that Midcoast was not certified and/or had not obtained the necessary approvals and STCs to

perform the work and did not have the necessary work force to complete the work.

27. When Aviamax learned of Midcoast's lack of certification, it questioned Bombardier, but

Bombardier assured Aviamax that the certifications would be forthcoming shortly and that Midcoast's

current lack of certification would not further delay the delivery of the Aircraft. Moreover, Bombardier

told Aviamax that it should not inquire with the FAA as to the status of Midcoast's certification as that

could cause problems for Midcoast and Bombardier with the FAA and result in further delays in the

delivery of the Aircraft.

28. When Aviamax specifically questioned Bombardier about the certainty of the delivery date

because of its importance to Aviamax due to the Resale Contract and other opportunities for the sale of the

Aircraft, Bombardier represented and promised that the Aircraft would be completed and delivered by July

2008, with an absolute outside date of August, 2008.

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29. Based upon these representations and promises, which Bombardier knew at the time were

false, Aviamax was induced into signing the Third Amendment which provided that in return for Aviamax

not canceling the Agreement due to Bombardier's breach, Bombardier would pay a certain amount per day

to Aviamax for the admitted unexcusable delays caused by Bombardier and Midcoast and that Bombardier

would deliver the Aircraft on or before August, 2008.

30. Thereafter, based upon and in reliance upon Bombardier's representations as described

above, Aviamax cancelled the Resale Contract with Ranch on June 6, 2008 and entered into a new contract

with a different purchaser on June 15, 2008 to sell the Aircraft for a price of $34,000,000.00.

31. Bombardier failed to deliver the Aircraft by July 15,2008, as promised, and Aviamax's new

purchaser for the Aircraft canceled its contract with Aviamax.

32. Aviamax thereafter, on August 16, 2008, entered into a letter of intent for the sale of the

Aircraft for $33,500,000, but that purchaser allowed the letter of intent to expire in September, 2008 since

the Aircraft still was not delivered by Bombardier, nor did it appear at such time that delivery was

imminent.

33. By the time Aviamax lost the new purchasers due to Bombardier's failure to make its new

required delivery date, the market for the resale of the Aircraft had become significantly depressed such

that the Aircraft was no longer worth the amount that Aviamax paid to Bombardier, and Aviamax has been

unable to find another buyer.

34. Bombardier made the above-referenced representations regarding Midcoast's certification

and Bombardier being able to deliver the Aircraft by August, 2008, knowing such representations to be

false when made in that, among other things, Bombardier knew that such delivery date was not possible

given the work that remained to be done on the Aircraft, Midcoast's continued lack of certification needed

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in order to complete such work, and Midcoast's lack of sufficient work force to complete the required

work.

35. Upon information and belief, Bombardier had further knowledge of the falsity of the above

described representations because Midcoast had failed to timely deliver several other Bombardier 605

aircraft to Bombardier customers due to Midcoast's lack of certification and lack of sufficient work force to

complete the work.

36. During the same time period, upon information and belief, Midcoast also failed to timely

delivery several Bombardier 850 aircraft with the delivery delays exceeding one year for the same reasons

stated herein.

37. Upon information and belief, despite Bombardier knowing that Aviamax would rely on

these representations in its dealings regarding the Agreement and the Resale Contract, Bombardier made

these representations in order to prevent Aviamax from canceling the Agreement, which would have

required Bombardier to take the Aircraft back and reimburse approximately $22,500,000.00 paid by

A viamax to Bombardier under the terms of the Agreement, and despite Bombardier knowing that Aviamax

would rely on these representations in its dealings regarding the Agreement and the Resale Contract.

38. At the time of the above-referenced representations by Bombardier, Bombardier was aware

of the Resale Contract for a higher price than that for which Bombardier had sold the Aircraft to Aviamax.

39. Bombardier intended for Aviamax to rely upon the above described representations, and

A viamax did so rely to its detriment.

40. Aviamax reasonably relied on Bombardier's representations in canceling the Resale

Contract and entering into a new contract and letter of intent with the assurance that Bombardier would

deliver the Aircraft in August, 2008.

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41. Had Bombardier revealed to Aviamax that the delivery of the Aircraft would be delayed

well beyond the promised date of August, 2008, it would not have cancelled the Resale Contract which

required Ranch to buy the Aircraft regardless of when the Aircraft was delivered, and Aviamax would have

sold the Aircraft to Ranch.

42. As a result of the foregoing, Aviamax has been damaged in an amount not yet ascertained

but believed to be in excess of $8,200,000.00.

AS AND FOR A SECOND CLAIM FOR RELIEF

43. Aviamax repeats and realleges each and every allegation contained in paragraphs 1 through

41 of the Complaint with the same force and effect as if set forth in full hereat.

44. To the extent Bombardier's representations to Aviamax described above were not

intentionally false, such representations were negligent in that Bombardier knew, or should have known in

the exercise of reasonable care, that Midcoast was not certified to complete the work on the Bombardier

605 and that the delivery date of August, 2008 was not possible at the time the representations were made

given the circumstances, including but not limited to the facts that Midcoast was not certified and

significant work on the Aircraft was still required.

45. Bombardier had a duty to Aviamax based upon the terms of the Agreement to use

subcontractors who were permitted to and able to complete the necessary work in order to timely deliver

the Aircraft, which duty was breached by Bombardier as a result of, among other things, the above

described misrepresentations.

46. As a result of the negligent misrepresentations made by Bombardier to A viamax, which were

reasonably relied upon by Aviamax, A viamax cancelled the Resale Contract and entered into a new

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contract and letter of intent which were thereafter cancelled by the purchaser due to Bombardier's failure to

deliver the Aircraft in August, 2008 as promised.

47. As a result of the foregoing, Aviamax has been damaged in an amount not yet ascertained

but believed to be in excess of $8,200,000.00.

AS AND FOR A THIRD CLAIM FOR RELIEF

48. Aviamax repeats and realleges each and every allegation contained in paragraphs 1 through

41 and 43 through 46 of this Complaint with the same force and effect as if set forth in full hereat.

49. Upon information and belief, Bombardier was aware at the time it entered into the

Agreement that Midcoast was not certified to conduct the work for which Bombardier recommended

Midcoast to Aviamax.

50. Pursuant to the Agreement, Bombardier owed a duty to Aviamax to produce the Aircraft

within the time frame required under the Agreement and to employ contractors and subcontractors who

were certified to work on the Aircraft and who could complete such work in a timely manner.

51. Upon information and belief, Bombardier was aware that a new certification would be

required by the FAA before Midcoast could perform work on a Bombardier 605 despite existing

certification for a Bombardier 604, since the Canadian equivalent of the FAA had required Bombardier to

obtain new certification to complete the Bombardier 605 despite certification on its predecessor, the

Bombardier 604.

52. Bombardier breached its duty to Aviamax by recommending Midcoast as the subcontractor

and continuing to insist that Aviamax use Midcoast when Bombardier knew that it would be impossible for

Midcoast to timely complete the work on the Aircraft.

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53. Bombardier's breach of duty caused significant damage to Aviamax, including the loss of

the Resale Contract, which loss was reasonably foreseeable.

54. As a result of the foregoing, Aviamax has been damaged in an amount not yet ascertained

but believed to be in excess of $8,200,000.00.

AS AND FOR A FOURTH CLAIM FOR RELIEF

55. Aviamax repeats and realleges each and every allegation contained in paragraphs 1 through

41, 43 through 46, and 48 through 53 of the Complaint with the same force and effect as if set forth in full

hereat.

56. At all times relevant hereto, Bombardier was a person as defined in the Connecticut Unfair

Trade Practices Act ("CUTPA"), C.G.S. §42-11O(a)(3).

57. At all times relevant hereto, Bombardier was engaged in trade or commerce within the

meaning ofC.G.S. §42-11O(a)(4).

58. Upon information and belief, Bombardier has made similar representations to other aircraft

purchasers and has subcontracted for Midcoast to outfit aircraft for which Midcoast lacked FAA

certification, and has failed to inform purchasers that Midcoast was not an authorized outfitter of the

Bombardier 605 aircraft, thereby causing significant delays or cancellation of aircraft deliveries in

Connecticut of aircraft ordered from Bombardier.

59. Upon information and belief, many, if not all, of the deliveries of these aircraft, including

the Aircraft, were to be delivered or were delivered late to Windsor Locks, Connecticut, where Bombardier

operates a facility.

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60. As a result of Bombardier's improper conduct described above, and improper, fraudulent or

negligent misrepresentations, and other improper business practices, Bombardier committed unfair and

deceptive acts or trade practices as defined in C.G.S.§42-llO(B).

61. In accordance with C.G.S.§42-110(g)(C), a copy of this Complaint is being mailed to the

Attorney General and the Commissioner of Consumer Protection for the State of Connecticut.

62. As a direct and proximate result of Bombardier's conduct, Aviamax has suffered damages in

an amount not yet ascertained, but believed to be in excess of $8,200,000.00. In addition, pursuant to

CUTP A, Aviamax is entitled to punitive damages in an amount to be determined by the Court, its costs and

disbursements together with its reasonable attorney's fees.

WHEREFORE, Aviamax prays as follows:

(a) On its first claim for relief against Bombardier in an amount not yet ascertained, but

believed to be in excess of $8,200,000.00.

(b) On its second claim for relief against Bombardier in an amount not yet ascertained, but

believed to be in excess of $8,200,000.00.

(c) On its third claim for relief against Bombardier in an amount not yet ascertained, but

believed to be in excess of $8,200,000.00.

(d) On its fourth claim for relief against Bombardier in an amount not yet ascertained, but

believed to be in excess of $8,200,000.00, together with punitive damages, its costs and

disbursements, and its reasonable attorney's fees for this action.

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(e) Its costs and disbursements, including reasonable attorneys' fees, and such other and further

relief as this Court deems just and proper.

THE PLAINTIFF

ETT H. LAST, ESQ.lFed Bar # CT07188

Gilbride, Tusa, Last & Spellane LLC
31 Brookside DrivelP.O. Box 658
Greenwich, Connecticut 08636
(203) 622-9360
and
Gilbride, Tusa, Last & Spellane LLC
420 Lexington Avenue
New York, New York 10170
(212) 692-9666
Its Attorneys

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