Company in Bad-Parts Case Files for Chapter 11
A Canoga Park company, whose former president pleaded no contest in 1986 to charges that he sold the Air Force counterfeit and defective aircraft parts, has filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
The company, Execuair Corp., listed $16.5 million in assets and $1.6 million in liabilities in its Jan. 29 bankruptcy petition. The company also said its business has “not been successfully conducted for several months,” and that it is unable to pay its debts.
Laurence Manhan pleaded no contest to one count of conspiracy to defraud the government and four counts of mail fraud after federal prosecutors in Oklahoma alleged that he and Execuair sold the Air Force counterfeit valve actuators. The valve parts are designed to cut off the flow of fuel in emergencies to prevent explosions in C-141 jet transports.
Manhan, who was Execuair’s president when the indictment was handed down by a grand jury in Oklahoma in June, 1986, was sentenced to five years in prison, which was later reduced to three years by a judge and fined $14,000.
Manhan was recently released. His son, David, was listed as president of the company in the bankruptcy court filing.
Reached at the company office, Laurence Manhan said, “We have been in business since June, 1956, and we have every intention of getting reorganized and continuing.”
Ted Richardson, assistant U.S. attorney in Oklahoma City, said Execuair, which pleaded guilty to similar charges, also paid a $16,000 fine and paid an additional $16,500 for government investigation costs. The company still owes $29,250 in restitution, he said.
Air Force officials have said that the parts were poorly made copies of parts made by Whittaker Controls, a North Hollywood aircraft parts maker that filed a civil suit against Execuair and also complained to federal authorities that Execuair was copying its parts.
Maureen McGuirl, an attorney representing Whittaker, said that federal marshals in August seized Execuair’s inventory. She said Whittaker found that Execuair had violated court orders issued in suits brought by Whittaker over trademark infringement and the use of Whittaker parts numbers by Execuair.
