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Discover air connected airline training academy { April 11 2003 }

Original Source Link: (May no longer be active)
   http://orlando.bizjournals.com/orlando/stories/2003/04/14/story2.html

http://orlando.bizjournals.com/orlando/stories/2003/04/14/story2.html

From the April 11, 2003 print edition
Flight school assets seized by trustee
Becky Knapp Staff Writer

SANFORD -- The owners of a now-defunct airline training school have agreed to put the family-run business into Chapter 7 bankruptcy -- effectively cooperating with an involuntary bankruptcy petition brought by more than 100 former students.

The decision coincides with an emergency hearing in U.S. Bankruptcy Court aimed at preserving what money Airline Training Academy Inc. has left.

Newly appointed trustee George Mills will take control of any assets and collect about $102,000 in insurance refunds due ATA after it canceled policies on its planes.

"Before assets start flying out the door, we just want to make sure they go to the right people," says Roy Kobert, attorney for the students.

"One way or another, we're going to get to the bottom of this and track down the money trail."

Making a Discovery?

One path being looked at leads to an unmarked portable building abutting a tarmac. Far from Sanford Orlando Airport's main terminal, a metal ramp leads to the headquarters of Discover Air.

Corporate records show that Discover Air and the training school share several directors, almost all family members of James "Captain Jim" Williams, a former Delta pilot credited with starting the training academy.

Inside Discover Air, office furniture and half a dozen fake potted plants give the place the feel of temporary residence. A pizza box, much too large for the small wastebasket holding it, is sandwiched between a wall and a desk. General Manager Tommy Barraza does not appear happy that still another reporter has landed on the charter air company's doorstep.

"We have nothing to do with the school," says Barraza. "We never got one penny from them."

Looking for assets

Students are not the only ones scrambling for ATA assets.

SunTrust Bank holds the note on about a dozen of the company's airplanes. An undetermined number of former employees, including instructors, were not paid for their last week of work, according to one former staffer, who also was notified that his health insurance was canceled on Feb. 14 -- about two weeks before the school closed.

"That shows they knew two weeks before they closed the doors they couldn't make the health insurance premiums for the employees," he says. "I'm starting to wonder now myself what was really going on."

Still taking money

When it looked as though the Williams family had simply walked away from the situation, Kobert filed a rare involuntary bankruptcy petition on behalf of students.

The legal action forces a business into bankruptcy court to deal with creditors.

In this case, there are plenty. "I have 110 ex-students who are owed nearly $7 million who signed the petition, and every day I'm getting more signatures," says Kobert.

"The more I find out, the more it looks like local Enron," says Raymond Roland, a former student who says he received 55 hours of training in a Cessna 172 for his $50,000 tuition fee. "That's all the training I got," he says, "but some students didn't even set foot in the door for a class and they're out their money, too."

Former student Ted Ballard questions why the flight school continued taking money from students. "They closed Thursday night," says Ballard. "On that Thursday, they took tuition money as late as 11 a.m., had it deposited in the bank by 2 p.m. and closed the school at 5 p.m."

The owners aren't talking.

After the school shut down, "they basically just disappeared," says Ballard.

The family has made no public statements about the school since then.

However, Barraza, who says he is in contact with members of the Williams family, emphasizes that the Williams' are involved in behind-the-scenes efforts to help those students who may have lost money. "They're trying to work this out on their own," he says. "That's why they're not available and they're in so many meetings."

2003 American City Business Journals Inc.


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