A Virginia electronics firm is near a deal to take over the operations of Woodbine defense contractor Daedalean Inc. and re-hire more than 160 employees who were laid off in April.

Eastern Computer Inc. hopes to win approval for the purchase soon from a U.S. Bankruptcy judge, the Small Business Administration and the Defense Department.

Daedalean develops and manufactures training simulators for military equipment such as helicopters and tanks.

ECI develops computersoftware and curriculum for Navy training programs, so "there's a nice complement between Daedalean and ECI," said Robert Felty Sr., vicepresident of ECI.

Felty would not say what criteria his company would use to decide which employees would get their jobs back. He stressed, however, that Daedalean's contracts would be fulfilled.

Daedalean laid off all of its 266 employees April 26 when Maryland National Bank stopped paying on the company's $3.6 million line of credit.

The bank's cutoff resulted after Daedalean's owners, Alagu P. Thiruvengdam of Ellicott City and Ambrose A. Hochrein of Olney, were convicted of tax evasion and the company faced "debarment," which could prohibit it from being awarded any federal contracts for up to three years.

Daedalean's headquarters is in Woodbine, but it has a secondHoward County facility on Red Branch Road in Columbia and three other facilities, in Orlando, Fla., and Crystal City and Dahlgren, Va.

Although one of Daedalean's Howard County facilities would be likelyto reopen if the sale goes through, it is uncertain which it would be or whether other Daedalean facilities also would reopen, according to sources from both companies.

The SBA, which helped Daedalean obtain its contracts, must first decide whether to approve the sale.

Ultimately, a federal bankruptcy court in Baltimore must also ap

prove the sale, a process that could take months.

Although Felty declined to give specifics of ECI's takeover proposal, Charles A. Maier, a spokesman for Daedalean, said it would mean employing more than 160 people in Howard County.

He said he had no clear indication ofthe fate of Daedalean's other four locations.

Although 11-year-old ECI does work for the Navy, the bulk of its business is for civilian agencies of the federal government, Felty said.

In addition to its Virginia locations, some of its 300 employees work in facilities near New York City and Princeton, N.J.

Among ECI's products is interactive software that can help students learn to land an airplane or drive a tank.

Felty said ECI, which has office, research and production facilities in Alexandria, Arlington, Petersburg and Newport News, Va., would see Daedalean contracts fulfilled if the deal went through, but it was too early to say which of its locations would continue to operate.

"We'd like to take over Daedalean yesterday, and do a really good job," Felty said.

But how and if the company takes over will depend on how quickly the issue can be settled in bankruptcycourt, he said.

A large part of that settlement process will hinge on the company's ability to obtain new contracts.

Its attorneys had been negotiating with the Navy, which initiated the debarment proceedings, even before Daedalean filed for bankruptcy, according to a June 5 letter from R. Timothy Hanlon, an attorney representing the company in those proceedings.

They proposed settling the issue in part by proposing that the company's two owners would not participate in the company's government business.

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