A Virginia electronics firm has agreed to buy troubled defense contractor Daedalean Inc. and will likely hire the company's remaining 151employees.
Eastern Computer Inc., based in Virginia Beach, has agreed to pay $4.3 million for four of five facilities run by Daedalean, which develops and manufactures training simulators for military equipment and tanks.
Daedalean, based in Columbia, has operated under bankruptcy courtsupervision since May.
The company's problems escalated followingadmissions of tax evasion by company owners in December. As a result, the U.S. Navy last spring stripped Daedalean of its ability to secure government contracts, and Maryland National Bank subsequently withdrew a line of credit covering company paychecks. Daedalean laid off all of its 266 employees with 20 minutes' notice April 26 following the bank's decision.
The company several days later filed bankruptcy papers to reorganize.
"Luckily, we've been able to keep the wolffrom our door for a while, and hopefully, the ECI deal will be able to keep the wolf from our door permanently," said Charles Docter, Daedalean's bankruptcy attorney.
Since Daedalean filed for bankruptcy, 42 of its employees have resigned, apparently because of the uncertainties of the bankruptcy, according to a notice of the proposed salefiled Thursday in U.S. Bankruptcy Court in Baltimore.
The remaining employees either decided against returning or were not asked to return to the scaled-down staff, Docter said.
Under the agreement, the sale must be approved by a bankruptcy judge at a Nov. 14 hearing, and Daedalean's contracts must be transferred by the Navy and federalSmall Business Administration in time for the sale's closing 90 dayslater.
Robert Felty Sr., ECI vice president, declined to comment on the agreement, saying ECI's executives are wary about companies poised to make a higher bid for Daedalean to disrupt the deal.
Objections to the sale or higher bids must be submitted by 11 a.m. Nov. 13to Docter's Washington law firm, Docter & Docter.
While ECI has not guaranteed it will hire current Daedalean workers, Doctor said that "as a matter of common sense, they're going to need them to complete these contracts."
Under the agreement, ECI will take over Daedalean's 24 contracts, its Columbia location, which has about 55 employees remaining, and locations in Orlando, Fla., and Crystal City and Dahlgren, Va., as its new Training and Tactical Systems Division.
Its Woodbine facility and former headquarters will be sold with other property and real estate holdings to help pay off unsecured debts, including $450,000 in wages and payroll taxes owed when the company shutdown.
Daedalean's owners, Alagu P. Thiruvengdam of Ellicott City and Ambrose A. Hochrein of Olney, pleaded guilty to tax evasion in connection with schemes using outdated government equipment and a worthless patent as tax write-offs for a dummy company called Technology Associates.
The men were divested of their control of the company, allowing its "debarment," or federal contract prohibition, to be lifted Sept. 27.
The remaining Daedalean managers have been offered management jobs with ECI.