AeroVironment Faces Class Action Over SCAR Program Contract Failures

The lawsuit, Norrell v. AeroVironment, Inc., filed in the Eastern District of Virginia, alleges the company and its executives violated the Securities Exchange Act of 1934 by failing to disclose intense competitive pressures regarding the U.S. Space Force’s Satellite Communication Augmentation Resource (SCAR) program. According to the complaint, AeroVironment allegedly overstated its business prospects after acquiring BlueHalo, LLC, which held the contract to modernize the Satellite Control Network.

Financial instability emerged in early 2026 when the U.S. government issued a stop work order on AeroVironment’s BADGER systems. The stock price dropped 16% on the news in January, followed by another 17% decline in March after SpaceNews reported the Space Force was reopening its acquisition strategy for the program. The situation culminated on March 10, when the company reported a $179 million quarterly operating loss, largely driven by a $151.3 million goodwill impairment in its space division. Following the announcement that the SCAR contract had been terminated and would require a recompetition, shares fell an additional 6%.