The Newport News/Williamsburg International Airport, which backed a $5 million bank loan to an airline that soon after went under, has negotiated a settlement with the bank and its former law firm.
The airport spent $3.5 million in state funds intended for capital improvements to pay off a loan between TowneBank and People Express Airlines instead. The bank and law firm Jones, Blechman, Woltz & Kelly agreed to give the airport $2 million in cash and interest rate discounts Thursday.
The settlement follows a state audit, the firing of the airport’s executive director and multiple resignations on the Peninsula Airport Commission’s board.
A “reasonable settlement” was one of several items Virginia Secretary of Transportation Aubrey Layne required before the airport could begin receiving state funds for capital improvements again.
He hadn’t read the full agreement on Thursday, but having learned the basics, he said, “That seems very reasonable to me.”
He said he would instruct the Department of Aviation to make the airport eligible for funding again and get the airport caught up on what it hadn’t been paid in the interim.
“I think this will bring it to a close,” he said.
TowneBank and the law firm will jointly pay $1.65 million in cash to the airport. It wasn’t clear how much each would pay.
The remaining $350,000 would come from reduced interest payments over 14 years on an unrelated bond the airport has with TowneBank. The airport will now owe the bank $16,913 per month versus $18,982 on that bond.
All three “expressly deny any wrongful acts, omissions or conduct on their part,” and agreed that they “acted reasonably and in good faith at the time of the loan transaction,” according to the agreement.
The airport commission agreed in closed session in June 2014 to guarantee the loan to People Express. In an open session, the commission approved a resolution authorizing the commission’s chair “to do and commit any act ” to provide for the “adequate, economical, and efficient provisions of air service and general business” at the airport.
No mention of the loan, the beneficiary or the amount were noted at the time.
The airport evicted People Express by early 2015 shortly after it started, and stopped, flying. The airport paid off the remainder of the loan, $4.5 million, using $3.5 million in state funds in February 2015. The airport’s lawyer at the time, Herbert V. Kelly Jr. of Jones, Blechman, Woltz & Kelly, signed off on the loan. Kelly was also chairman of TowneBank’s Executive Loan Committee and a member of the TowneBank Peninsula board.
A joint statement released Thursday said “all involved believed the loan, the guarantee, the actions leading up to its adoption by the (Peninsula Airport Commission), and the decisions as to collateral were proper and for the benefit of the airport and the region.”
People Express Airlines was not released from any potential liability as part of the agreement.
Original article can be found here ➤ https://pilotonline.com
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment