CARRYING BAGGAGE: AIRCRAFT MAKER COMING TO CAPE IS EMBROILED IN A SERIES OF LAWSUITS IN OTHER CITIES

An aircraft manufacturer lured to Cape Girardeau with promises of state and city start-up money is embroiled in a series of lawsuits over the airplane it intends to build, It is unclear if the outcome of the litigation will jeopardize the company's future here.

In the meantime, Renaissance Aircraft this week moved most of its equipment and machinery to a temporary facility at the Cape Girardeau Regional Airport.

At issue is Renaissance's license to build the Luscombe airplane, the potential for 200 new jobs in the city, financial assistance for the company and another litigant's stake in the Luscombe's manufacture.

John Dearden, company president, said the pending litigation is not a threat to the company's proposed operation in Cape Girardeau.

"It's more of a nuisance, but if people take it seriously, it becomes a problem for us. In terms of us doing what we want to do in Cape, it's not really a problem."

But city officials' excitement over the company's future in Cape Girardeau could be tempered,because:

* Renaissance Aircraft, currently based in Eastman, Ga., is involved in a Georgia lawsuit over ownership of equipment it needs to build the Luscombe, a 1930s-style, two-seat, recreational plane.

* The other litigant in the suit is the Don Luscombe Aviation History Foundation, a not-for-profit Arizona organization that holds the certification for the Luscombe and gave exclusive rights to Renaissance to build and sell the plane. The foundation claims Renaissance wrongly took equipment needed to build the plane.

* Renaissance and the foundation also are involved in two Arizona lawsuits, one pertaining to drawings of the aircraft and the other over alleged defamation by the foundation against Renaissance.

* The Cape Girardeau City Council agreed in January to provide $2.1 million, to be generated by issuing bonds, to construct a new facility and infrastructure for Renaissance at the Cape Girardeau Regional Airport. With such a large investment in the project, officials will likely proceed cautiously lest the deal fall through.

* The Missouri Department of Economic Development is in the process of reviewing a loan application for Renaissance, which may or may not be affected by the pending litigation.

Bruce Loy, airport manager, was part of the team that worked to bring Renaissance to the area and has worked closely with Dearden during the process. He shares Dearden's belief that the lawsuits will not threaten Cape Girardeau's deal with Renaissance.

"From what we understand, there's not a lot of validity to the lawsuit. Win or lose, they're still going to be coming anyway."

But attorneys for the Don Luscombe Aviation History Foundation propose that the deal could well be in jeopardy, particularly if the foundation chooses to terminate its licensing agreement with Renaissance.

"To give Mr. Dearden some credit, I don't doubt that he believes he can go forward," said Thomas Weland, the foundation's attorney on the Arizona suits. "I believe he's mistaken. I'm quite sure he's mistaken."

The Georgia suit

The Don Luscombe Aviation History Foundation, which is an organization of Luscombe enthusiasts charged with preserving the history of the plane, gave exclusive, worldwide licensing rights to Renaissance in October 1996. Because the foundation holds the certificate to the plane and because Renaissance and the foundation are required to share engineering and other types of information, the two have to try to work in harmony.

But trouble apparently began after both claimed ownership to special equipment needed to manufacture the plane.

The foundation claims in its lawsuit that Renaissance deliberately took the equipment from storage in Michigan and relocated it to its operation in Georgia. The foundation contends Renaissance took the equipment, allegedly valued at more than $8 million, despite knowing that it already was the subject of a legal battle between the foundation and another entity.

Peter Lown, the foundation's Georgia attorney, said Renaissance told the foundation it was going to get the equipment, but the foundation never gave Renaissance permission. Now, the foundation has filed suit against Renaissance to get the equipment back.

"The foundation never gave them permission to take the property without their concurrence," Lown said. "They knew generally that Renaissance was going to try to do something but only learned about the movement of the property after the fact. The foundation thinks it's the rightful owner of those assets and has filed suit to recover them."

Though Dearden and his attorney, Eric Rowe, declined to comment on specifics of the suit, a motion for summary judgment filed Jan. 29 indicates Renaissance was leasing the equipment -- machinery, tooling, jigs and dies -- from another entity.

Rowe said Renaissance hopes to get the case thrown out during an April 3 hearing in Dodge County, Ga. In the meantime, a Georgia judge ruled in February that Renaissance must disclose the litigation to any of its debtors or anyone else who has an interest in the equipment in question. Further, the judge ruled that Renaissance must notify the foundation at least three days prior to relocating any of the property, including to its temporary facility in Cape Girardeau.

The Arizona suits

More litigation, filed in Arizona, between the the foundation and Renaissance came about after neither could come to an agreement about updates and revisions to engineering specifications and other drawings of the Luscombe. Renaissance apparently wanted all the drawings, which Weland said is a "room full" of documents, sent to them at once. The foundation wanted to send them in chunks. Renaissance says it wanted to update copies of the drawings so as not to ruin the originals. The foundation wanted changes made to the originals.

Weland contends Renaissance has not returned some of the drawings to the foundation. He added that if the foundation had given Renaissance all the drawings at once, Renaissance feasibly could have obtained a new type certificate for the Luscombe in its own name. But he conceded that while the foundation feared Renaissance could steal the plane's design, the foundation also had ulterior motives for its actions.

"What the foundation hoped to get out of this was a complete set of updated drawings they could then license to someone else for a much bigger royalty," he said. "They are not, however, going to be in the new airplane business. If Renaissance for some reason went out of business, the foundation would then have a much more valuable archive they could then license to someone else."

As these suits progressed through the courts, the foundation allegedly made remarks perceived to be inappropriate about Renaissance, leading the company to file a defamation suit against the organization. In February, a Georgia judge ruled that the foundation could not initiate contact with anyone who has a vested interest in Renaissance, nor could it make disparaging remarks about the company.

Mysterious deliveries

In February, anonymously mailed manila envelopes containing copies of court documents and correspondence arrived at the Southeast Missourian, the Cape Girardeau city manager's office, the office of Cape Girardeau Regional Airport director Bruce Loy and the Missouri Department of Economic Development, which is considering providing a loan package to Renaissance to help it set up in Cape Girardeau.

Kristi Jamison, spokeswoman for the Department of Economic Development, said she could not comment on the Renaissance application.

"As with any project that is looking for potential financial assistance from the state, we perform a thorough review of the application before making any decisions," she said.

Dearden said he has heard positive comments from the state about the loan.

Lawyers for both sides are investigating the origin of the envelopes. While Renaissance attorney Eric Rowe contends a supporter of the foundation sent the envelopes, the foundation's attorney for the Georgia lawsuit, Peter Lown, denied the accusation.

"We're not admitting to that, and we'd like to find out who's doing it," Lown said. "We don't like what was done."

Loy said he believes the documents and phone calls were the work of someone wanting to make mischief.

"We basically look at it pretty much as child's play," he said. "Obviously, when you get something like that, you research it and look into it. We have all the paperwork to show that from what we're able to tell there's no validity to their comments."

Moving forward

Officials from the city, industrial recruitment boards and local corporations worked for about nine months to bring Renaissance here. In January, the Cape Girardeau City Council approved an agreement with Renaissance in which the city will provide money for construction of a 50,000-square-foot facility, equipment, furnishings, water and sewer lines, roads and parking lots.

Officials also helped Renaissance apply for a loan package from the Missouri Department of Economic Development. A spokesperson for the department declined to comment Monday on the status of the company's loan application.

Dearden said that once the bonds have been issued, he anticipates the new facility will be ready by autumn. In the meantime, he intends to operate out of temporary facilities in a hangar near the airport. He expects to hire 15 to 30 local employees to start production of 10 to 20 airplanes. Within two years, Dearden said he hopes to hire about 200 people.

"The suit in Georgia only impacts us in terms of it slows down our schedule," he said. "If it were to slow down by some fashion the funds that are being made available to us by Missouri and Cape, then obviously we can't be hiring people and going into production until those funds flow."

Each Luscombe will sell for around $70,000. The city will collect $500 for every plane that is manufactured at the Cape Girardeau site. If a plane is sold from there, the $500 fee will be waived, but the city will collect sales tax on the aircraft. Bond money provided by the city will be repaid by Renaissance over 20 years.

Weland said Renaissance also agreed to give the foundation $1,000 for the sale of each Luscombe.

Loy said that as far as the city is concerned, everything is moving ahead.

"We're just looking forward to this thing moving forward and that's all we see right now," he said. "I think it's in fast-forward actually. Everything looks very good."

Cape Girardeau bound

Weland maintains that Renaissance will struggle to begin production in Cape Girardeau.

"I don't think there's much chance they're going to get going as long as these suits are going on," he said. "The foundation has a valid claim on this stuff, and Renaissance knew about it before the licensing agreement."

Meanwhile, Dearden said Renaissance is continuing to prepare for its move to Cape Girardeau.

"I think Cape has actually, in terms of getting us here, gotten itself a very attractive package," he said. "It's not jeopardized by anything the foundation is doing. We fully intend to bring matters to a resolution with the foundation to ensure they will have no choice but to cease all this type of activity in the future."

Dearden said he has been open with the city about the litigation, including arbitration that took place prior to the suits, and he welcomes the opportunity to explain as much as he can about the situation to anyone who asks.

"I told people they may hear something because the foundation is not adverse to making statements to publications that are not exactly the facts of the matter," he said.