Thursday, January 31, 2013

Beechcraft B100 King Air, N499SW: Stinger, Lincoln County Face Off in Lawsuit Following CEO’s Death - Accident occurred December 18, 2012 in Libby, Montana

In wake of Carl Douglas’ death, a dispute between county and company spills out into the public

 Two years ago, Paul Rumelhart, with the Kootenai River Development Council, was an eager supporter of Stinger Welding, Inc. Today, when you ask about the relationship between the company and Lincoln County, Rumelhart will refer you to a lawyer.

In the weeks following the death of Stinger Welding owner and CEO Carl Douglas, a legal dispute between the Lincoln County Port Authority and the Arizona-based company has spilled out into public view. The lawsuit, filed in October 2012, says Stinger failed to comply with a 2009 development agreement that would have brought more than 200 jobs to the area. The disagreement came to the forefront last week when Steve Patrick, vice president of Stinger’s northwest operations, wrote an editorial in the Kootenai Valley Record stating that Lincoln County failed to support the company since the beginning.

On the night of Dec. 18, 2012, Stinger Welding CEO Carl Douglas was flying from Coolidge, Az. to Libby, when the small plane he was piloting crashed just miles from its destination. Douglas and Stinger employee John Smith both died in the crash on Swede Mountain. The cause of the accident is currently under investigation by the National Transportation Safety Board.

In the weeks following Douglas’ death, the company changed hands to his widow, Stephanie Jordan. On Jan. 15, the company was voluntarily put into receivership, where a court-appointed receiver manages the company until the ownership situation is resolved.

As of early January, Stinger had 69 employees, far short of what the company said it would employ when it first arrived in 2009. That year, the company was working closely with the Lincoln County Port Authority and the Kootenai River Development Council, headed up by Rumelhart, to develop the former Stimson Lumber Co. site in Libby. On June 26 of that year, Lincoln County and Stinger Welding signed a 24-page development agreement to bring a bridge-building facility to Lincoln County. At the time, it was hailed as a fresh start for one of the most economically depressed areas in the state.

But according to court documents filed by Lincoln County, problems arose almost immediately. Part of the development agreement stated that Stinger would construct a large welding facility on the Stimson site and, once complete, the port authority would purchase it at the cost of construction and lease it back.

According to court documents, Stinger failed to obtain funding for the facility’s construction and in July 2009 the county provided a $3.4 million grant to the company to start the project. Attorney Allan Payne said at that point the port authority still planned on purchasing the facility from Stinger, minus the $3.4 million.

“They certainly didn’t just give that money to Stinger,” Payne said. “We say the port owns it and they say Stinger owns it and that’s what we’re trying to sort out.”

Stinger completed the building in May 2011. In hopes of repaying loans, Stinger sought funding through the New Market Tax Credits program. During that process, according to the lawsuit, Stinger allegedly misled the port authority by claiming it needed the title to the property it occupied. On July 18, 2011, the port authority conveyed the title to Stinger for $186,000.

Payne said Stinger also failed to bring the high-paying jobs to Libby that it promised in the 2009 development agreement.

“Stinger didn’t fulfill its obligation,” Payne said. “There was a commitment to bring (more than 200) well-paying jobs to Lincoln County and that never happened.”

On Nov. 1, Stinger filed a counter lawsuit against the Lincoln County Port Authority, denying most of the initial allegations and accusing the agency of fraud, slander and deceit, among other things.

Less than two months later, Patrick wrote a letter to the editor in the Jan. 22 edition of the Kootenai Valley Record, demanding the county drop its “bizarre lawsuit.” In the letter, Patrick wrote that Lincoln County failed to gather the funds and grants to purchase the building and that Douglas felt betrayed before his death.

“Is Stinger Welding going to survive and continue to pump a multi-million dollar payroll into the community?” Patrick wrote. “These answers largely reside in whether Lincoln County drops its lawsuit against Carl Douglas and Stinger Welding. Carl is dead and Stinger is operating in receivership … spending scarce dollars defending against an admittedly bizarre lawsuit is the last thing Stinger needs in its quest to continue operations and provide jobs in Lincoln County.”

Payne balked at the idea of Lincoln County dropping its lawsuit, adding if Stinger believes it’s in the right, the company should welcome it.

“If they were in a position of strength, they wouldn’t be demanding the county drop this,” he said.

Patrick disagrees, though, saying the county is not being truthful with its people or Stinger. In his editorial, Patrick said the lawsuit would only hurt the people employed by the welding company.

“This is not economic development on the county’s part, it is economic strangulation,” Patrick wrote.

Payne expects the case to go to trial sometime in 2014.

CORRECTION: This story has been changed. The price of the building’s lease was originally reported as $1 annually, which is incorrect. It also should have said Stinger planned to create 202 jobs, not 250.

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NTSB Identification: WPR13FA073
14 CFR Part 91: General Aviation
Accident occurred Tuesday, December 18, 2012 in Libby, MT
Aircraft: BEECH B100, registration: N499SW
Injuries: 2 Fatal.

This is preliminary information, subject to change, and may contain errors. Any errors in this report will be corrected when the final report has been completed. NTSB investigators either traveled in support of this investigation or conducted a significant amount of investigative work without any travel, and used data obtained from various sources to prepare this aircraft accident report.

On December 18, 2012, about 0002 mountain standard time (MST), a Beech B100, N499SW, collided with trees at Libby, Montana. Stinger Welding was operating the airplane under the provisions of 14 Code of Federal Regulations (CFR) Part 91. The noncertificated pilot and one passenger sustained fatal injuries; the airplane sustained substantial damage from impact forces. The cross-country personal flight departed Coolidge, Arizona, about 2025 MST on December 17th, with Libby as the planned destination. Visual meteorological conditions prevailed at the nearest official reporting station of Sandpoint, Idaho, 264 degrees at 46 miles, and an instrument flight rules (IFR) flight plan had been filed.

The Federal Aviation Administration (FAA) reported that the pilot had been cleared for the GPS-A instrument approach procedure for the Libby Airport. The clearance had a crossing restriction of 10,700 feet at the PACCE intersection, which was the initial approach fix for the GPS-A approach. The pilot acknowledged that clearance at 2353. At 2359, the airplane target was about 7 miles south of the airport; the pilot reported the field in sight, and cancelled the IFR flight plan.

A police officer reported that he observed an airplane fly over the city of Libby, which was north of the airport; the airplane then turned toward the airport. The officer went to the airport to investigate, but observed no airplane. He noted that it was foggy in town, but the airport was clear. He also observed that the rotating beacon was illuminated, but not the pilot controlled runway lighting.

When the pilot did not appear at a company function at midday on December 18, they reported him overdue. The Prescott, Arizona, Automated Flight Service Station (AFSS) issued an alert notice (ALNOT) at 1102 MST; the wreckage was located at 1835.

The National Transportation Safety Board investigator-in-charge (IIC) and investigators from the FAA and Honeywell examined the wreckage on site. A description of the debris field references debris from left and right of the centerline of the debris path. The debris was through trees on a slope that went downhill from left to right.

The first identified point of contact (FIPC) was a topped tree with branches on the ground below it and in the direction of the debris field. About 50 feet from the tree were composite shards, and a piece of the composite engine nacelle, which had a hole punched in it.

The next point of contact was a 4-foot tree stump with shiny splinters on the stump. The lower portion of the tree had been displaced about 30 feet in the direction of the debris field with the top folded back toward the stump. Underneath the tree trunk were the nose gear and a couple of control surfaces followed by wing pieces.

One engine with the propeller attached was about 50 feet from the stump, and on the right side of the debris path. Next on the left side of the debris path was the outboard half of one propeller blade; another propeller blade was about 10 feet further into the debris field.

Midway into the debris field were several trees with sheet metal wrapped around them. Near the midpoint of the debris field, a portion of the instrument panel had imbedded into a tree about 15 feet above the ground. The wiring bundle hung down the tree trunk to ground level. To the left of the instrument panel was one of the largest pieces of wreckage. This piece contained the left and right horizontal stabilizers, vertical stabilizer, and part of one wing with the landing gear strut attached. The rudder separated, but was a few feet left of this piece.

Next in the debris field was a 6- by 8-foot piece of twisted metal, which contained the throttle quadrant.

About 100 feet right of the debris path centerline and downhill from the throttle quadrant was a 10-foot section of the aft cabin. This section was connected by steel cables and wires to a 4- by 7-foot piece of twisted metal.

The furthest large piece of wreckage was the second engine; the propeller hub with two blades attached had separated.