Dynamic Aerostructures' chapter 11 filing in February 2025 affected the aerospace and defense supply chain. The Valencia, California-based company—operating as FMI Aerostructures—ranked among the largest independent aerospace manufacturing sites in North America, producing mission-critical structural components for platforms including the B-2 Spirit stealth bomber, F-22 Raptor, and spacecraft for SpaceX and Blue Origin.
Investment banker Configure Partners had contacted 73 potential buyers beginning nine months before the filing, ultimately identifying aerospace-focused private equity firm Avem Partners as the stalking horse bidder. Avem closed the acquisition on April 15, 2025—under 50 days from petition.
Dynamic Aerostructures LLC, et al. (3 affiliated debtors)
Trade Name
FMI Aerostructures (Forrest Machining, Inc.)
Headquarters
Valencia, California
Industry
Aerospace & Defense Manufacturing
Founded
1978
Petition Date
February 26, 2025
Court
U.S. Bankruptcy Court, District of Delaware
Case Number
25-10292 (Lead Case, Jointly Administered)
Employees
180+ (240 at 2021 acquisition)
Facility
226,000 sq. ft. across two Southern California facilities
Prepetition Debt
~$55 million total (~$42M secured)
DIP Facility
$12.5 million (CRG Financial)
Stalking Horse Bid
$16 million (FMI Holdco LLC / Avem Partners)
Sale Closed
April 15, 2025
Case Dismissed
September 3, 2025
Claims Agent
Kurtzman Carson Consultants / Verita Global
Debtors' Counsel
Ropes & Gray LLP; Chipman Brown Cicero & Cole LLP
Financial Advisor
Berkeley Research Group
Investment Banker
Configure Partners
Case Snapshot
Company Background
Four decades of aerospace manufacturing. Forrest Machining, Inc. was founded in 1978 in Valencia, California, serving the aerospace and defense industry.
FMI developed expertise in fracture-critical, durability-critical, maintenance-critical, and flight-critical components—designations reflecting the safety implications of each part category. In aerospace manufacturing, these classifications determine inspection requirements, material traceability, and quality control protocols. A fracture-critical component, for instance, is one whose failure would result in loss of the aircraft structure.
Defense Prime Customer Relationships.
FMI Aerostructures supplied mission-critical parts to the nation's largest defense contractors across multiple platforms:
On August 10, 2021, Endeavour Capital acquired FMI Aerostructures. Endeavour, a Portland, Oregon-based private equity firm founded in 1991, targets companies with enterprise values between $25-$250 million and EBITDA of $5-$50 million—typically profitable businesses positioned for operational improvement and growth.
At acquisition, FMI employed over 240 workers.
Following the acquisition, Dynamic Aerostructures LLC was formed as the parent holding company, with Dynamic Aerostructures Intermediate LLC as an intermediate holding entity and Forrest Machining LLC as the operating subsidiary.
Within several years of the acquisition, quality control issues emerged that, according to management, predated the private equity ownership but surfaced during post-acquisition operational reviews.
At petition, the company owed lenders nearly $55 million total, with approximately $41.5-42.6 million in secured debt. The company reported assets in the $10-50 million range against liabilities of $50-100 million.
Industry Context: Aerospace Supply Chain Under Stress.
Dynamic Aerostructures' distress occurred against a backdrop of stress across the aerospace supply chain. Aerospace and defense supply chain disruptions increased 35% year-over-year from 2023 to 2024, rising from 9,188 incidents to 12,356. Labor disruptions surged 33%, reaching 1,182 incidents as manufacturers struggled to staff production lines.
The restructuring wave extended beyond Dynamic Aerostructures. Business sales linked to bankruptcies, mergers, and acquisitions caused 828 supply chain disruptions in 2024. Aerospace supplier bankruptcies surged 146% year-over-year, with corporate restructurings rising 110%. Dynamic Aerostructures' filing occurred during this period.
Tier 2/3 suppliers—companies like FMI that supply parts to larger manufacturers who then sell to OEMs—faced liquidity pressure. Many tier-3 and tier-4 suppliers continued to face tight liquidity positions into 2025. Late payments from larger OEMs further exacerbated financial instability. Financing concerns grew, with 49% of suppliers citing lack of financial resources as a challenge—up from 41% in 2024.
Dynamic Aerostructures' management and advisors pursued a prepetition marketing process to identify a stalking horse bidder. Configure Partners, an Atlanta-based credit-oriented boutique investment bank spun out of Guggenheim, was retained to conduct the sale process. The firm specializes in debt placement, credit resolution, special situations, and M&A advisory.
The 45 parties executing NDAs represented a conversion rate of approximately 62%. Of those conducting diligence, nine submitted proposals, representing a 20% proposal rate from NDA signers.
Avem's portfolio included nine companies as of late 2025, with prior aerospace experience including the 2023 acquisition of Astech Engineered Products.
Chapter 11 Filing and First Days
Petition and Initial Relief.
On February 26, 2025, Dynamic Aerostructures LLC and two affiliated debtors filed voluntary chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware. The filing encompassed the entire corporate structure:
Debtor
Case Number
Dynamic Aerostructures LLC
25-10292 (Lead)
Dynamic Aerostructures Intermediate LLC
25-10293
Forrest Machining LLC
25-10294
CEO Eric N. Ellis filed the First Day Declaration in support of first day motions, outlining the company's history, causes of distress, and need for immediate relief. Interim first day orders were entered on February 27, 2025—one day after filing—covering operational matters, all approved on an interim basis:
Joint Administration
Claims Agent Appointment
Utilities Protection
Tax Authority Payments
Customer Programs Continuation
Insurance Maintenance
Wages and Benefits
Cash Management System
Critical Vendor Payments
DIP Financing.
The debtors filed a DIP Motion seeking a $12.5 million loan from CRG Financial LLC, a specialty finance firm with over 15 years of experience in distressed debt and claims, having participated in more than 600 bankruptcies. CRG Financial provides bridge financing to debtors in bankruptcy cases.
The Interim DIP Order authorized the debtors to obtain postpetition senior secured financing and use cash collateral with adequate protection for prepetition lenders.
Creditor Dynamics and Settlements
Defense Prime Customer Participation.
Lockheed Martin Corporation retained Verrill Dana LLP counsel and formally appeared in the proceedings on March 4, 2025.
The settlement with Northrop Grumman Systems Corporation was approved on March 21, 2025. Northrop Grumman—customer for B-2 Spirit and E-2D Advanced Hawkeye components—had disputes with the debtors. CEO Eric Ellis filed a declaration supporting the settlement motion.
While settlement terms were not publicly disclosed in detail, the settlement resolved disputes with a major customer.
TRM Equity retained DLA Piper LLP counsel and appeared on March 24, 2025.
Limited Creditor Objections.
Several creditors filed limited objections to first day relief:
Creditor
Objection
Resolution
Mitsubishi HC Capital America
Cash Management Motion
Resolved
Mitsubishi HC Capital America
Critical Vendors Motion
Resolved
Rexford Industrial (Landlord)
Cure Amounts
Resolved per Cure Order
Southern California Edison
Utilities Motion
Resolved
Rexford Industrial's cure amount objection related to the debtors' Valencia facility. The Cure Amounts Order on March 25, 2025 addressed these issues.
Final first day orders were entered by March 20, 2025—less than a month after filing.
The chapter 11 petitions and the Sale Motion were filed on the same date. With nine months of prepetition marketing complete and a stalking horse bid in hand, the in-court process provided an overbid opportunity.
Avem Partners Acquisition Closing.
On April 15, 2025, Avem Partners closed the acquisition of substantially all assets of Dynamic Aerostructures and affiliates, emerging as the winning bidder in the section 363 sale process. The closing came 48 days after the bankruptcy filing.
James Carroll of Carroll Services LLC was retained as Chief Restructuring Officer in June 2025—after the sale closed—to manage post-sale wind-down and case administration.
Fee Applications and Case Closure.
Following the April 2025 sale closing, the case entered a wind-down phase and fee applications followed:
Professional
Final Fee Application
Configure Partners
April 30, 2025
Chipman Brown Cicero & Cole
June 26, 2025
Berkeley Research Group
June 27, 2025
Ropes & Gray
June 25, 2025
On September 3, 2025, the court entered the Dismissal Order, concluding all three chapter 11 cases approximately six months from petition date. The dismissal order confirmed:
Consummation of the sale
Transfer of books and records to the Purchaser (Avem Partners)
Satisfaction of DIP financing obligations
Resolution of administrative matters
The final claims register was filed September 12, 2025.
Key Timeline
Date
Event
1978
Forrest Machining, Inc. founded in Valencia, CA
August 10, 2021
Endeavour Capital acquires FMI Aerostructures
May 2024
Prepetition marketing process begins (Configure Partners)
February 26, 2025
Chapter 11 petitions filed (3 debtors)
February 26, 2025
First Day Declaration filed; Sale Motion filed
February 27, 2025
Interim First Day Orders entered
February 28, 2025
Interim DIP Order ($12.5M, CRG Financial)
March 4, 2025
Lockheed Martin counsel appears
March 20, 2025
Final First Day Orders entered
March 21, 2025
Final DIP Order
March 21, 2025
Northrop Grumman Settlement Order
March 21, 2025
Professional retention orders
March 25, 2025
Bidding Procedures Order entered
March 25, 2025
Cure Amounts Order entered
April 15, 2025
Avem Partners closes acquisition
June 10, 2025
CRO retention order (James Carroll)
June 25-27, 2025
Final professional fee applications
August 29, 2025
Final Monthly Operating Reports filed
September 3, 2025
Dismissal Order - cases concluded
September 12, 2025
Final claims register filed
Frequently Asked Questions
What is Dynamic Aerostructures?
Dynamic Aerostructures, operating as FMI Aerostructures, was one of the largest independent aerospace and defense manufacturing sites in North America. Founded in 1978, the company supplied mission-critical structural components for platforms including the B-2 Spirit stealth bomber, F-22 Raptor, F-35 Lightning, and spacecraft for SpaceX and Blue Origin. The 226,000 square-foot Valencia, California facility employed over 180 workers.
What caused the bankruptcy?
CEO Eric Ellis attributed the filing to legacy quality control issues discovered after Endeavour Capital's 2021 acquisition—problems that predated the private equity ownership but surfaced during post-acquisition operational reviews. The company self-reported concerns to customers. Additional factors included rising inventory costs from inflation in specialty metals and composites, plus money-losing customer contracts that locked the company into below-cost production.
Who acquired the company and for how much?
Avem Partners, a Manhattan Beach, California-based private equity firm specializing in aerospace investments, acquired substantially all assets through a $16 million stalking horse bid. The sale closed on April 15, 2025—48 days from the petition date. True West Capital Partners provided capital support, and the acquisition included significant participation from Avem principals and aerospace industry executives. Avem's portfolio includes nine aerospace and industrial companies, with prior experience from its 2023 acquisition of Astech Engineered Products.
What was the prepetition marketing process?
Configure Partners, the investment banker, conducted a prepetition marketing process beginning in May 2024—approximately nine months before the bankruptcy filing. The firm contacted 73 potential strategic and financial parties, of which 45 executed non-disclosure agreements to conduct due diligence. Nine parties ultimately submitted proposals. The process identified Avem Partners as the stalking horse bidder.
What defense programs relied on FMI's components?
FMI supplied structural parts for multiple critical defense platforms: the B-2 Spirit stealth bomber, F-22 Raptor, F-35 Lightning, F-15 Eagle, C-130 Hercules, and E-2D Advanced Hawkeye. Commercial aviation programs through Boeing and Spirit AeroSystems also relied on FMI manufacturing. Space customers included SpaceX and Blue Origin launch vehicle programs.
How was DIP financing structured?
CRG Financial, a specialty finance firm with over 15 years of experience in bankruptcy lending, provided a $12.5 million DIP facility. The interim order was approved February 28, 2025—two days after filing—with the final order entered March 21, 2025.
What was the Northrop Grumman settlement about?
The settlement with Northrop Grumman Systems Corporation was approved March 21, 2025, resolving disputes with this major aerospace prime contractor. Northrop Grumman was a customer for B-2 Spirit and E-2D Advanced Hawkeye components. While specific terms were not publicly disclosed, the settlement resolved disputes with a major customer.
How long did the bankruptcy case last?
The cases were filed February 26, 2025 and dismissed September 3, 2025—approximately six months total. The sale closed April 15, 2025, 48 days after filing. A Chief Restructuring Officer was retained in June 2025.
Who were the key professionals in the case?
Ropes & Gray LLP served as lead counsel, with Chipman Brown Cicero & Cole as Delaware co-counsel. Berkeley Research Group served as financial advisor, while Configure Partners conducted the prepetition marketing process and served as investment banker. Kurtzman Carson Consultants (now rebranded as Verita Global) served as claims and noticing agent. James Carroll of Carroll Services LLC was retained as Chief Restructuring Officer.
What is the broader context of aerospace supplier distress?
Dynamic Aerostructures' bankruptcy occurred amid stress across the aerospace supply chain. Aerospace and defense supply chain disruptions increased 35% year-over-year in 2024, with bankruptcies surging 146% and corporate restructurings up 110%. Tier 2/3 suppliers faced tight liquidity, late payments from larger OEMs, and financing challenges, with 49% citing lack of financial resources as a problem—up from 41% the prior year. Personnel shortages affected 65% of aerospace suppliers.
For additional coverage of aerospace and defense industry restructurings, visit the ElevenFlo bankruptcy blog.
Sources
First Day Declaration /documents/ac767a4d-d9da-400d-8f57-93e0e44bf0f4/
F-35 deliveries were already averaging over seven months of delays https://intelligence.supplyframe.com/5-challenges-aerospace-defense-manufacturers/
founded in 1991 https://www.crunchbase.com/organization/endeavour-capital
attributed the bankruptcy to "persistent manufacturing practice inconsistencies" https://www.law360.com/bankruptcy-authority/articles/2309301/inflation-manufacturing-woes-landed-aerospace-co-in-ch-11
self-reported quality concerns to its customers https://aviationweek.com/defense/supply-chain/dynamic-aerostructures-files-bankruptcy
specialty metals, advanced composites, and rare-earth elements remained in global short supply https://www.mckinsey.com/industries/aerospace-and-defense/our-insights/addressing-continued-turbulence-the-commercial-aerospace-supply-chain
Aerospace and defense supply chain disruptions increased 35% year-over-year https://resilinc.ai/blog/aerospace-and-defense-supply-chain-challenges/
Many tier-3 and tier-4 suppliers continued to face tight liquidity positions https://thedefensewatch.com/policy-strategy/aerospace-supply-chains-still-strained-in-2025-as-industry-recovery-slows/
Configure Partners https://configurepartners.com/
prepetition marketing process began in May 2024 https://chapter11cases.com/blogs/news/aerospace-supplier-dynamic-aerostructures-files-chapter-11-seeks-sale-approval-with-16m-stalking-horse-bid
Manhattan Beach, California-based private equity firm founded in 2017 https://tracxn.com/d/private-equity/avem-partners/__VGMcNLqs5nD0H3v6Vc1tqRAAg9iXm1Af_H-laAWCQ_k
CRG Financial LLC https://www.crgfinancial.com/
described a strategic focus on aerospace and defense companies with strong fundamentals https://www.pehub.com/avem-partners-completes-buyout-of-manufacturer-fmi-aerostructures/
Kurtzman Carson Consultants / Verita Global https://www.veritaglobal.net/
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.