Cessna Aircraft signed a letter of intent (LOI) yesterday with Columbia Aircraft of Bend, Ore., to acquire selected assets and certain liabilities of the manufacturer of low-wing, high-performance piston airplanes. In conjunction with the LOI, Columbia filed a voluntary petition for reorganization under Chapter 11 of the U.S. bankruptcy code. Explained Carl Young, Columbia chief restructuring officer, “We have explored many options over the past months. This path enables the company to manage present cash flow and liabilities while pursuing a plan that enables us to continue operating until a final sale can be completed.” He added that the sale to Cessna “offers the best avenue to maximize value for all of Columbia’s stakeholders and existing and future customers.”

Explaining Cessna’s rationale for the acquisition, Cessna chairman, president and CEO Jack Pelton said, “Columbia’s unique capability in the high-end, single-engine piston market makes it a perfect complement to our next generation piston product line.”

The sale is contingent upon the approval of the bankruptcy court and satisfaction of the closing conditions, as specified in the LOI. Among these is execution of a definitive purchase agreement with Cessna.