The Icon Lawsuit
A lawsuit has been filed by a group of minority shareholders against the Chinese entity Shanghai Pudong Science and Technology Investment, Inc. (PTSI), the majority group that owns Icon. This lawsuit alleges that the company is planning to transfer its technology to China. It also examines the impact that such a transfer would have on the company’s fortunes and, consequently, on the shareholders’ portfolios. If Icon’s U.S. presence were to disappear, it is thought that the value of its stock could decline.
Those involved in the lawsuit include former Boeing CEO and Icon board member Phil Condit, as well as Icon founder and former CEO Kirk Hawkins. For Hawkins, Icon was much more than just an LSA. The lawsuit further contends that PTSI is passing up on valuable business opportunities because the company doesn’t wish to succeed and is thus defrauding the minority shareholders.
Although its airplane, the A5, an LSA amphibian, has been in existence for over a decade, it has not achieved significant sales success. Since the first Icon A5 was delivered to a customer in 2015, the company has only delivered just over 100 units. And the price has increased, rising from around $140,000 for the initial aircraft to $389,000 for a fully equipped model today.
During the process, the program faced significant delays in bringing the aircraft to the market. Nevertheless, the plane itself is quite impressive. It features high build quality and a stall-resistant design. The FAA granted Icon an exemption from the LSA weight limit to accommodate this stall-resistant design.
The aircraft has been involved in a couple of highly publicized fatal accidents. One instance saw two Icon employees killed when the pilot inadvertently flew into a canyon with no exit. Another involved the crash of an Icon flown by Hall of Fame baseball pitcher Roy Halladay. He died when his LSA amphibian crashed into Tampa Bay after he aggressively maneuvered the plane at a very low altitude. Neither accident was the fault of the airplane.
We will keep you informed of any further developments.
