Daedalean Inc., which laid off all of its employees last month afterbeing threatened with a cutoff of federal contracts, received letters of intent Friday from two companies interested in buying the company's defense contracts and hiring its employees, its bankruptcy attorney said Friday.
"The news for the future is good, because we look like we've two real serious purchasers," said Charles Docter of the Washington law firm, Docter and Docter. "Both of these parties hope that we will have complete agreements within two to three weeks."
He would not name the companies competing to buy Daedalean's contracts, but said both would be able to meet contracting criteria of the Small Business Administration, through which Daedalean received itscontracts. He said they were "large small-businesses" that also do defense department work.
While Docter said both companies are interested in "keeping the employees and going forward with the business of Daedalean," he said it was too early to determine if all former Daedalean employees would be asked back to work.
The Woodbine-base company develops and manufactures simulators for military equipment such as helicopters and tanks.
The company has a second Howard Countyfacility on Red Branch Road in Columbia and three other facilities, in Orlando, Fla., and Crystal City and Dahlgren, Va.
The company has been operating with a minimal staff under federal bankruptcy courtsupervision since May 6, after Maryland National Bank agreed to extend a line of credit to the company.
Daedalean on April 30 filed for protection from its creditors under Chapter 11 of the Federal Bankruptcy Act.
About 100 of the 266 employees laid off without being paid their salaries for April have kept the company going since then in hopes of finding a buyer.
Maryland National effectively shut thecompany down April 26 when it stopped paying on Daedalean's $3.6 million line of credit.
That credit was linked to the company's ability to gain federal contracts, suspended by the U.S. Navy April 1 pending "debarment" proceedings that could prohibit the company from being awarded any federal contracts for up to three years.
The proposed debarment was a result of the December tax-evasion convictions of its owners, Alagu P. Thiruvengdam of Ellicott City and Ambrose A. Hochrein of Olney.
The company has proposed a plan to the Navy that would take the two partnersout of any significant management role for six months.
Docter said the company was working out financing for company operations for the next seven weeks with Maryland National, and hoped to present a budget Tuesday to bankruptcy Judge E. Stephen Derby. "In case we don't fully agree, then the judge may have to iron it out," Docter added.
Both Thiruvengdam, who is 60 percent owner, and Hochrein, who is 40 percent owner, pleaded guilty in December to one count of tax evasion in connection with charges that they used outdated government equipment and a worthless patent as tax write-offs for a dummy company called Technology Associates.
Both men were fined $25,000 and Hochrein was sentenced to six months of work release,five years' probation and 750 hours of community service while Thiruvengdam was sentenced to four months of work release, three years of probation and 600 hours of community service.