Uploaded August 2026 | Updated September 2026, 2 weeks ago
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Sacramento E.D.M. Inc. v. Hynes Aviation Industries | 2017 WL 1383289 (2017)
A struggling company thought it had found a lifeline when an experienced business consultant proposed an arrangement to increase its cash flow and stave off bankruptcy, but the terms of the contract were much worse than the company expected.
Were the terms so bad that the contract should be voided as unconscionable? That was the issue before the court in Sacramento EDM versus Heinz Aviation Industries.
Sacramento EDM, or SAC EDM for short, was a metal machining company.
Dan Folk, the company's president and founder, met Michael Hynes, the president and owner of Hynes Aviation Industries, or HAI. Facing financial distress, SAC EDM retained Hynes as a business consultant. Hines and Folk formed Oklahoma EDM, or OKEDM, a company that existed to loan money to SAC EDM. Through the joint venture, Hynes purchased SAC EDM's equipment and leased it back to the company. This deal generated cash flow for SAC EDM and provided tax benefit for both parties. However, SAC EDM continued to struggle.
The relationship between the parties soured, and SAC EDM sued Hynes and HAI.
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Get more case briefs explained with Quimbee. Quimbee has over 42,700 case briefs (and counting) keyed to 988 casebooks ► quimbee.com/case-briefs-overview
Sacramento E.D.M. Inc. v. Hynes Aviation Industries | 2017 WL 1383289 (2017)
A struggling company thought it had found a lifeline when an experienced business consultant proposed an arrangement to increase its cash flow and stave off bankruptcy, but the terms of the contract were much worse than the company expected.
Were the terms so bad that the contract should be voided as unconscionable? That was the issue before the court in Sacramento EDM versus Heinz Aviation Industries.
Sacramento EDM, or SAC EDM for short, was a metal machining company.
Dan Folk, the company's president and founder, met Michael Hynes, the president and owner of Hynes Aviation Industries, or HAI. Facing financial distress, SAC EDM retained Hynes as a business consultant. Hines and Folk formed Oklahoma EDM, or OKEDM, a company that existed to loan money to SAC EDM. Through the joint venture, Hynes purchased SAC EDM's equipment and leased it back to the company. This deal generated cash flow for SAC EDM and provided tax benefit for both parties. However, SAC EDM continued to struggle.
The relationship between the parties soured, and SAC EDM sued Hynes and HAI.
Want more details on this case? Get the rule of law, issues, holding and reasonings, and more case facts here: quimbee.com/cases/sacramento-e-d-m-inc-v-hynes-aviation-industries
The Quimbee App features over 42,700 case briefs keyed to 988 casebooks. Try it free for 7 days! ► quimbee.com/case-briefs-overview
Have Questions about this Case? Submit your questions and get answers from a real attorney here: quimbee.com/cases/sacramento-e-d-m-inc-v-hynes-aviation-industries
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