After Abrupt Closing, Daedalean May Rehire Workers

Conditions Dependon Whether New Owner Is Found

May 05, 1991|By Erik Nelson | Erik Nelson,Staff writer

Some employees of Woodbine-based Daedalean Inc. may be called back to work tomorrow, a week after the defense contractor ran out of moneyand laid off its entire work force of 266, including about 100 in Howard County, its bankruptcy attorney said.

"We're hopeful that some of the employees will be back on Monday, certainly sometime next week," said Charles Docter of the Washington law firm Docter and Docter.

All of the company's 266 employees were laid off with 20 minutes'notice April 26 after Maryland National Bank stopped paying on Daedalean's $3.6 million line of credit. The employees were sent home without paychecks they were to receive for the second half of April.

"We are working with the bank right now trying to work something out so that some of the payroll is restored," Docter said Friday. The number of employees called back will depend on the financing the company is able to obtain, he said.

The idea is to keep the company functioning long enough to arrange for someone to purchase Daedalean and distance it from its current owners, Alagu P. Thiruvengadam of EllicottCity and Ambrose A. Hochrein of Olney.

The two partners pleaded guilty to federal income tax evasion in December, prompting the Navy to propose "debarment," or a prohibition from receiving future federalcontracts of up to three years.

That action, announced by the Navy last Tuesday, prevented the company from receiving new federal contracts during the proceedings and also removed one of the conditions attached to Maryland National's credit line, Docter said.

The Navy officially notified the company of the proposed debarment April 1, said the company's designated spokesman, Charles A. Maier.

"We've prepared a substantial package of information and we submitted that to the Navy April 24," he said. "If it were accepted it would take the two partners out of any significant management role for a six-month period."

Docter said the most likely solution to the company's dilemma is that the company or its contracts be purchased, but he would not rule out other solutions.

A man who contacted The Howard County Sun last week and identified himself only as a Daedalean employee laid off from the company's Dahlgren, Va., facility, said he and his co-workers had been discussing the possibility of employees taking over the company's contracts.

Asked about the likelihood of employee ownership of the company, Docter said, "that's always possible but I have not been approached by any employee group."

A handful of Daedalean financial and administrative employees were at work last week gathering information for Maryland National and other banks that might revive the company.

Whatever deal is worked out with a bank will have to be approved by the Navy and U.S. Bankruptcy Judge E. Stephen Derby in Baltimore, Docter said. The company filed Tuesday for protection from creditors under Chapter 11 of the Federal Bankruptcy Act.

Daedalean, which develops and manufactures simulators for military equipment such as helicopters and tanks, is headquartered in Woodbine and has a second facility on Red Branch Road in Columbia. It has threeother facilities, in Crystal City and Dahlgren, and Orlando, Fla.

The abrupt layoff flooded the county's state unemployment office on Rumsey Road, which is around the corner from Daedalean's Columbia facility. The office so far has filed claims for 59 of the company's employees.

"I've seen companies close, but never like this," said Margaret Askew, who has managed the unemployment office for six years.

"The statement was, 'You've got 20 minutes to get out of the building,' but nobody was there to enforce it," said one Daedalean employeeand county resident, who spoke on condition of anonymity.

The engineer said he was told that employees asked back on Monday would be paid for time worked under Chapter 11, but should not expect the two weeks' pay they were due April 26, or the two weeks' pay covering the following pay period, which ended the same day.

Their main function would be "concluding contracts that we can conclude in short order to make the old company more palatable for the new owner," and raise money to cover back wages and taxes.

"It kind of gives you a sour taste in your mouth," said Roxanne Henrich of Catonsville, a Daedalean software engineer for 2 1/2 years. She said she and her husband were buying a house, "and now everything is kind of put on hold becauseI don't know what I'm doing at this point. I really kind of have to ask myself: Do I really want to go back there? If they did it to me once would they do it again?"

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