On July 24, 2010, at 1230 eastern daylight time, an experimental, amateur built Mulloy, Zodiac 601XL, N601CX, received substantial damage when it crashed shortly after takeoff from runway 31, at the Farrell James Airfield (PVT), Kannapolis, North Carolina. The certificated commercial pilot received serious injuries. Visual meteorological conditions prevailed and no flight plan was filed for the personal flight. The airplane was registered to and operated by the commercial pilot under the provisions of 14 Code of Federal Regulations (CFR) Part 91. The flight was origination at the time of the accident.

The pilot stated that shortly after takeoff the engine lost full power. The pilot performed a forced landing into a wooded area and the airplane came to rest inverted. Damage to the airplane included wings, the empennage, and the horizontal and vertical stabilizers.

Examination of the wreckage by a Federal Aviation Administration (FAA) inspector found the airplane inverted in a heavily wooded area off the end of runway 31. The airplane came to rest on a heading of 308 degrees magnetic. Flight control continuity was established for all control surfaces. Examination of the fuel system found water in the fuel line between the engine driven fuel pump and the carburetor, and in the fuel strainer. The inspector stated that he found no other pre-existing mechanical problems with the engine following his examination.

A subsequent interview with the pilot revealed that he did not recall taking samples of the fuel via the sump drains during his preflight inspection.