December 25, 2011

Direct Air

I swear every day or seriously 3 or 4 times per week I get an e-mail about some Family Ties discount or some buy 1 get 1 free ticket deal.    

Update on lawsuit

A group of seven former Pace Airlines Inc. officials and employees could be required to testify in the lawsuit involving the defunct Winston-Salem airline and a South Carolina tourism company.  A legal filing in the Florence division of the U.S. District Court requires Edwin Allman III, bankruptcy trustee for Pace, to offer by Jan. 30 a list of expert witnesses regarding Pace's $1.46 million breach-of-contract lawsuit filed by Pace shortly before its September 2009 collapse.   The lawsuit involves a contract dispute with Southern Sky Air & Tours LLC, doing business as Direct Air. It represents the largest potential settlement amount that could go to former Pace employees through the bankruptcy estate.

Former Pace officials mentioned in the filing are Charlie Creech, its president during the time of the contract dispute; Jim McPhail, a vice president; Phil Rolison, operations director; Catherine Roberts, finance director; and Bill Ivie, crew scheduler. Also mentioned are employees Christie Parker and Beth Collins. They were chosen because they may have had direct knowledge of the negotiation of the contract with Direct Air.  Two Direct Air employees and an attorney representing the company also are listed as potential witnesses. Direct Air has until March 15 to determine its witness list.

In August 2010, the N.C. Labor Department filed a claim for $1.5 million in back wages for 423 employees with the trustee. The department is requesting interest on the back wages.  Allman has collected about $435,000 for the Pace estate's account. On Nov. 22, a U.S. Bankruptcy Court judge approved a $400,000 settlement between Pace and the estate of former Pace owner Bob Brooks.

1 comment:

Steve Foley said...

I don't see Pace (or the BK trustee) prevailing on this, or at least not to the tune of $1.5 million.

My synopsis:

Direct contracted with Pace for $2 million in services in the form of charter flights.

Direct canceled with $1.5 million remaining.

Pace did not incur any costs associated with the remaining $1.5 million.

Direct claims they agreed to charter Boeing 737-500 aircraft, and would use Boeing 737-200 for 30 days, giving Pace time to produce the Boeing 737-500 planes. Direct further claims Pace never produced the Boeing 737-500 planes, so they canceled due to Pace's breach. They also counter-claim for damages caused by not having access to the larger aircraft and having to cancel tickets, offer free flights, etc.