On September 16, 1995, at 2020 central daylight time (cdt), a Swearingen SA-226TC, N169GA, operated by Grand Aire Express, Inc., of Monroe, Michigan, received substantial damage after takeoff when it struck trees off the departure end of runway 27L at Michiana Regional Airport, South Bend, Indiana. The pilot-in- command (PIC) and Copilot reported no injuries. The positioning 14 CFR Part 91 flight was operating in visual meteorological conditions. An IFR flight plan was filed. The flight originated from South Bend, Indiana, at 2020 cdt. During the repositioning flight, the PIC briefed they would be conducting training with the newly designated captain (co-pilot) on departure. At approximately 300 feet above ground level, the PIC retarded the right engine power lever to simulate an engine failure. The co-pilot commenced the emergency procedures as prescribed in the aircraft flight manual. The airplane began losing altitude and airspeed near single engine best angle of climb airspeed (Vxse). The PIC said that he became fixated on airspeed and did not notice anything else. The PIC terminated the training at the same time the airplane struck the trees near the departure end of the runway. The airplane landed back at South Bend Airport without any handling problems. Post flight inspection revealed extensive damage to both wing leading edges, wing ribs, engine inlets, engines, and to both propellers. Tree pieces were found in the oil cooler, and the compressor inlet. The Pilot's Operating Handbook (POH) states a caution under the emergency procedures for a engine failure during takeoff-takeoff continued at or above takeoff decision speed (V1), which states "...Minimum altitude for obstacle clearance should be maintained until single engine best rate of climb speed is attained...." A note also followed the caution statement which stated, "...Failure of either engine at or shortly above V1 will cause a marked decrease in performance and will require careful control of the airplane...When operating in high density altitude conditions with loss of an engine, precise control of pitch attitude and altitude become dominant. The pilot must use care to ensure positive clearance above the runway before retracting the landing gear and while accelerating to takeoff speed at 50 foot height (V50) or single engine best rate of climb (Vyse)...". At 11,500 pounds gross weight, the single engine climb rate should have been a positive 700 feet per minute.