Countersuit: Air Advantage goes on offensive against feds

Air Advantage L.L.C. shouldn’t be responsible for paying back millions in loans received through a U.S. government program, because the same program effectively “destroyed” the tech company’s expansion plans by “suddenly and inexplicably” cutting off funds.

That’s according to a countersuit filed Aug. 5 in the U.S. District Court for the Eastern District of Michigan by Frankenmuth-based Air Advantage against the United States of America.

The countersuit claims that the Rural Utility Service (RUS), a division of the U.S. Department of Agriculture, breached a loan agreement when it stopped making payments on a total of $64 million awarded to Air Advantage through the American Recovery and Reinvestment Act (ARRA).  

The countersuit claims the payments were stopped when RUS officials learned that a possible investment mentioned in Air Advantage’s original application had not panned out. Attorneys for Air Advantage argue in the countersuit that the company never guaranteed outside investments.

“On July 1, 2011, without legal justification and inexplicably, RUS notified Air Advantage that funding advances would stop due to deficiencies found” during an audit, “the most substantive one being Air Advantage’s lack of infused equity,” Air Advantage’s counterclaim states. (Read more)

(This story original appeared in the Aug. 13, 2016 print edition of The Tuscola County Advertiser and can be read in its entirety here).

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