Cessna Aircraft Company, the world’s leading manufacturer of general aviation aircraft and a subsidiary of Textron Inc. (NYSE: TXT), said today it has signed a Letter of Intent (LOI) with Columbia Aircraft Manufacturing Corporation to acquire selected assets and certain liabilities of the Bend, Oregon-based aircraft manufacturer.

According to Cessna Chairman, President and CEO Jack J. Pelton, “Columbia’s unique capability in the high-end single-engine piston market makes it a perfect complement to our Next Generation Piston product line and could provide our customers with the option of an outstanding low-wing, high-performance piston airplane. We believe the combination of this superb product line and Cessna’s world class support structure and brand will be unbeatable.”

Columbia today filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

“We have explored many options over the past months,” said Columbia Chief Restructuring Officer Carl Young. “This path enables the Company to manage its present cash flow and liabilities while pursuing a plan that enables us to continue operating until a final sale can be completed.”

Columbia submitted a motion with the Bankruptcy Court seeking approval of the sale to Cessna and establishing bidding procedures that enable other interested bidders to submit offers and bid at an auction to be held in November. The sale to Cessna is contingent upon the approval of the Bankruptcy Court and the satisfaction of the closing conditions set forth in the LOI, including the execution of a definitive purchase agreement with Cessna.

 “The sale of Columbia Aircraft Manufacturing assets to Cessna offers the best avenue to maximize value for all of Columbia’s stakeholders and existing and future customers. Cessna is excited about the prospect of adding the Columbia products to its product line and will provide additional capabilities, world-class processes and financial strength to effectively serve existing Columbia customers and grow the business. Under the agreement reached with Cessna all product warranty and service issues will continue to be honored post-acquisition and customers should expect an enhanced customer experience once the deal closes,” Young said.

Young emphasized that the bankruptcy filing was deemed necessary to enable the Company to continue its operations including manufacturing and delivering of new aircraft and uninterrupted support of the installed customer through parts, warranty and technical assistance.