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                     UNITED STATES OF AMERICA
                            before the
                SECURITIES AND EXCHANGE COMMISSION

Securities Exchange Act of 1934
Release No. 36699 / January 11, 1996

Accounting and Auditing Enforcement
Release No. 752  / January 11, 1996

Administrative Proceeding File No. 3-8920


IN THE MATTER OF AMERICAN AIRCRAFT CORPORATION

     The Commission issued an Order pursuant to Section 21C of
     the Exchange Act instituting a public administrative
     proceeding against American Aircraft Corporation ("AAC") to
     determine whether AAC violated the antifraud, reporting,
     books and records and internal control provisions of the
     Exchange Act.

     The Order alleges that, in its Form 10-Q and Form 10-K
     filings with the Commission for the second quarter of its
     fiscal 1988 through the end of its fiscal 1991, AAC
     improperly reported designs acquired from its then President
     as assets valued at $4,687,500 before amortization, which
     represented at least 50% of AAC's total assets in each
     filing.  In fact, AAC should not have reported the designs
     at all or should have reported the designs as having a zero
     dollar value.  The Order also alleges that, during its
     fiscal years 1988 through 1991, AAC improperly capitalized
     certain research and development costs as assets, thus
     materially overstating its assets.  A hearing will be held
     to determine the truth of these allegations.