Aerospace manufacturer the Nordam Group Inc. has filed for chapter 11 bankruptcy protection after a high-stakes contract dispute over a key part for business jets with Pratt & Whitney Canada Corp., WSJ Pro reported. Nordam spent $200 million to develop the nacelle system — a housing system that works with the engine as an onboard power plant — for Gulfstream G500 and G600 jets, court papers say. The system is approved by regulators and is performing well in test flights, said Chief Executive Meredith Madden in a statement yesterday. However, the cost of the nacelle program has put a strain on Nordam’s finances, and the company turned to bankruptcy for breathing room to reorganize, court papers say. “If at all reasonably possible,” Nordam hopes to negotiate a consensual resolution with lenders and Pratt & Whitney, according to John C. DiDonato, a restructuring professional leading the turnaround effort. The company wasn’t able to do it outside of bankruptcy, he said in a declaration filed with the U.S. Bankruptcy Court in Wilmington, Del. Pratt & Whitney spokeswoman Jenny Dervin said the company worked “diligently for many months with our supplier Nordam and its lenders” offering “financial and other support that, in our view, could have kept Nordam out of bankruptcy.” Nordam rebuffed what she called “business continuity options,” and chose bankruptcy, according to Pratt & Whitney. Existing lenders led by JPMorgan Chase & Co. are offering up to $45 million in bankruptcy financing, money that could support the business while restructuring talks continue.
