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ORANGE COUNTY BRIEFLY

Troubled Firm Releases Quarterly Results

September 19, 1997|(P.J. Huffstutter)

IRVINE — Aviation Distributors Inc. released its second-quarter results in July despite its accountant's recommendation to wait, according to a regulatory filing Wednesday.

Arthur Andersen LLP said in the document that it advised the airplane parts reseller to delay the report until an internal investigation of the company's financial records had been completed. Aviation consulted with its attorneys and decided to release its quarterly results on time, according to the filing with the Securities and Exchange Commission. The company posted a 21% decline in net income for the quarter and a 45% gain in revenue.

Aviation staff declined to comment Thursday.

Arthur Andersen resigned as Aviation's accountant on Aug. 29 and withdrew three years' worth of audits. On Sept. 3, Aviation announced the departure, saying the Big Six firm left after discovering that Aviation allegedly submitted false sales figures to obtain a bank loan, then reportedly tried to cover up these discrepancies.

Trading in Aviation stock was halted on the Nasdaq market at the time. It won't resume until the company hires a new accountant and releases revised financial records.

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