The nearly 3½-year legal case involving Pace Airlines Inc. was cleared for landing today by a U.S. Bankruptcy Court judge.
Judge Thomas Waldrep Jr. approved the final estate plan submitted by trustee Edwin Allman III. The report already had been audited by the estate’s bankruptcy administrator.
That means 421 former employees were approved to receive compensation for going up to six weeks without pay before the company was shut down in September 2009. Most employees stayed on because of fears that Pace officials would try to deny their unemployment benefits if they quit.
The Winston-Salem company, once an anchor tenant at Smith Reynolds Airport, was forced into Chapter 7 bankruptcy protection in January 2010.
The filing lists the maximum amount of compensation at $3,261, which would be about $2,185 after an estimated 33 percent tax rate is taken out. The compensation is subject to typical payroll tax deductions. There are 324 employees eligible for the maximum amount.
The employees will be the only creditors to receive compensation, Allman said. Most employees have said they would treat what compensation they received as found money when they got it.
Allman said the employees should receive their compensation within 10 to 14 days depending on how quickly Waldrep enters an order for distribution and the bankruptcy administrator sets a schedule.
Pace and its predecessors had been an anchor tenant at the airport for decades until the company collapsed four months after William Rodgers Sr. took ownership in May 2009. Rodgers has a Feb. 18 hearing date in Forsyth County Superior Court related to the 27 criminal counts he faces in the county.
Waldrep approved fees and commissions totaling $369,313 for Allman and the law firm of Allman Spry Leggett & Crumpler P.A. as part of the final steps for closing the estate.
Both Waldrep and Michael West, the bankruptcy administrator, praised Allman’s doggedness in pursuit of as-sets that could be converted into money for creditors.
“This case began badly as an involuntary bankruptcy with no one to prepare schedules and documents and no one wanting to stand up and say they were responsible, and for good reason since this company was in disarray,” Waldrep said.
Lee Booth has been listed as a co-owner of Pace by Allman because of documents he signed with Rodgers during and after the airline’s collapse, and Booth took possession of some Pace assets.
The Pace estate holds $1.86 million after the liquidation of all of its discovered assets. Most of that came through a $1 million settlement reached in February 2012 with the insurer representing Rodgers.
“The trustee dug deep into the documents, investigated the acts of the principals involved, took some risks with the lawsuits he brought, and was successful,” Waldrep said. “But for his efforts and those of his attorneys, it could be said the creditors would not have received anything.”
“His work has been exceptional, particularly since he has not been paid anything on the case for almost three years.”
Rodgers took ownership in May 2009, signing a promissory note to pay $9 million to the estate of Bob Brooks – founder of the Hooters restaurant chain – for stock in Pace Airlines LLC and Pace Airlines II LLC and take over $6 million in liabilities.
In January 2012, a Forsyth grand jury indicted Rodgers on one count of willful failure to pay group health-insurance premiums to Blue Cross Blue Shield of North Carolina and 26 counts of willful failure to deliver notice to employees. Each count is a Class H felony, which could carry a sentence of five to 20 months in prison.
Rodgers’ case has been continued numerous times since he was arrested by state insurance officers Sept. 22, 2009, just five days after the company shut down for good. Rodgers has been out of jail on a $50,000 bond since September 2009.
Mark Calloway, Rodgers' attorney, and Noelle Talley, a spokeswoman for the N.C. Attorney General's Office, have said it is possible the case could be continued again. Rodgers' case was assigned to the N.C. Attorney General's Office in September 2010. It is also possible that a trial date could be set or Rodgers could enter a plea at the hearing.
Source: http://www.journalnow.com
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