Great Plains Suit Refiled

[Townsend]

Great Plains Suit Refiled

http://kwgs.com/post/great-plains-suit-refiled

The bankrupt Great Plains Airlines flies back into the news. The airline went bust in 2004.

It got its start-up loan from the Bank of Oklahoma. With the Airport's blessing, Air Force Plant Number three, now the home of Spirit Aerosystems and Navistar, was used as collateral. The City and the Airport paid $7.1 million  to settle the debt in 2008. But that agreement was overturned by the state supreme court when challenged by a group of tax payers.

Now the bank has refilled its lawsuit, seeking $15.6-million. That is the original amount, plus interest.                                 

The original deal was struck during the Susan Savage administration, and the settlement was worked out during Kathy Taylor's term in office as Mayor.

Below is BOK's news release/media summary on the case:

Bank of Oklahoma, today, filed a lawsuit against the Tulsa Airports Improvements Trust (TAIT), an affiliate of the City of Tulsa, which owns and operates the Tulsa International Airport.  The lawsuit seeks $15.6 million for repayment of a loan made by the Bank of Oklahoma in 2000 to Great Plains Airlines.

Background information and timeline:

At the time, the City of Tulsa had promoted the start-up airline as way to procure direct flights to the East and West Coasts.
The loan was secured by a mortgage on the facility housing Spirit AeroSystems and the Navistar bus plant.  In the event that Great Plains could not repay the loan, TAIT was to purchase the mortgaged facility for the amount of the loan, which would affect repayment to the Bank.
Great Plains defaulted on the loan in 2004 when $7.1 million was owed and TAIT failed to live up to its agreement.
By 2008, the loan balance had grown to $11.8 million with additional interest and legal fees.
After the Tulsa District Court made a number of rulings in favor of the bank, the City and TAIT settled the litigation as the City paid the Bank $7.1 million.
In 2011, a taxpayer-led lawsuit attacked the settlement and the Oklahoma Supreme Court ruled the City was not responsible for the loan.  The Bank returned the $7.1 million to the City.

Current status:

After the settlement funds were repaid to the City, in the summer of 2012, TAIT re-initiated settlement discussions with the Bank with a goal to avoid another lawsuit by acknowledging responsibility and by making partial restitution to the bank.
During the last eight months, senior representatives of TAIT and the Bank have met regularly in an attempt to forge a common ground in the spirit of protecting the airport, a major economic force in our community.
According to executives at the Bank of Oklahoma, the Airport Trust recently advised it would not pay anything to satisfy the obligation and terminated all attempts at amicable resolution, leaving the Bank no other alternative but to file the lawsuit.
The loan now has a balance of $15.6 million because almost a decade has passed since the loan went into default.

[Teatownclown]

Looks like the airport will have to go bankrupt. Not very pretty for the re-election chances of Dewey.

What now? And why wasn't this in any of the tax packages?

[Red Arrow]

Looks like the airport will have to go bankrupt. Not very pretty for the re-election chances of Dewey.
What now?

Take a lesson from Pres. Obama, blame it on Bush.

[Oil Capital]

Looks like the airport will have to go bankrupt. Not very pretty for the re-election chances of Dewey.

What now? And why wasn't this in any of the tax packages?

Seems like it would/should hurt Kathy Taylor's chances far more.

[RecycleMichael]

The airline went bust in 2004, years before Kathy Taylor became Mayor. She just tried to pay it off.

The real problems happened in year 2000 when they made the loan and in 2004 when the airport trust refused to pay up.

If anything, blame should be put on Susan Savage (Mayor in 2000) and Bill LaFortune (Mayor in 2004).

Blaming Dewey Bartlett or Kathy Taylor is just wrong.

[sgrizzle]

Seems like it would/should hurt Kathy Taylor's chances far more.

Because she negotiated a settlement for far less?

She had nothing to do with making the loan or the airline.

[RecycleMichael]

I thought the idea of Great Plains Airlines made sense. If Tulsa could get direct flights to the coasts it would make us more business friendly.

Then the executives bought some used planes that couldn't fly that far. Then 9-11 happened and all airlines began to lose passengers by the thousands.

Bad decisions and bad luck make it hard to recover.

[Teatownclown]

The airline went bust in 2004, years before Kathy Taylor became Mayor. She just tried to pay it off.

The real problems happened in year 2000 when they made the loan and in 2004 when the airport trust refused to pay up.

If anything, blame should be put on Susan Savage (Mayor in 2000) and Bill LaFortune (Mayor in 2004).

Blaming Dewey Bartlett or Kathy Taylor is just wrong.

I don't think Mayor Bartlett understands the city is committed to backing up the Airport Trust. Otherwise, the bank may seize the asset.

FAA may be goofy on this too. I don't understand their role, but they should be some help and don't seem to be saying anything....

This will take time and the debt continues to accrue interest. The amount due seems to have doubled during Dewey's term.

Once again I will ask why this bail out was not included in the Vision 2 or most recent tax proposal? Not as high a priority as downtown entertainment?

[Conan71]

Why did we have a "settlement" which didn't settle the debt and release the city or airport trust from further liability?

I thought that was the whole point of the settlement when it was done.

[Teatownclown]

It's a conspiracy to privatize the airport. The Bank Of Oklahoma Airport in Tulsa?

You conservatives have a bizarre mind set....and too many of our business leaders have no integrity when it comes to paying off obligations.

Where's the Chamber on this?

[Gaspar]

It's a conspiracy to privatize the airport. The Bank Of Oklahoma Airport in Tulsa?

You conservatives have a bizarre mind set....and too many of our business leaders have no integrity when it comes to paying off obligations.

Where's the Chamber on this?

[Teatownclown]

Gassie, you really need to come up with better material. I never realized how juvenile you are.

Just pretend this doesn't exist and maybe it will go away....

[Gaspar]

Gassie, you really need to come up with better material. I never realized how juvenile you are.

Just pretend this doesn't exist and maybe it will go away....

I'm sorry.  For the life of me, I'm not sure what prevents me from taking you seriously.

[Conan71]

It's a conspiracy to privatize the airport. The Bank Of Oklahoma Airport in Tulsa?

You conservatives have a bizarre mind set....and too many of our business leaders have no integrity when it comes to paying off obligations.

Where's the Chamber on this?

What do "you conservatives" have to do with this?  Don't be such a one trick clown.

I have a background in lending.  As a general principal, when a lender accepts a settlement whether it's for the agreed upon contractual amount or for less after a note has gone into default, the debtor is released from any further claims.  The only exceptions would be when a lender repossesses collateral and collects a deficiency balance between what was owed and what the collateral ultimately was sold for.  That's not what happened here.

IIRC, when the city settled up with the $7+ million settlement, citizens were told this closed the issue with BOK. 

I'd love to see a copy of the original settlement agreement and figure out how BOK is coming back around again with their hand out and why this is just now happening.  If I were more of a tinfoil hat type I might think it was trying to tip the next mayoral election one way or another but the settlement was negotiated under Kathy Taylor's last term, so if anything, this would be a poor reflection on her.  With her ties to Kaiser and BOK, I simply don't see that being a reason.

Secondly, why has the city never tried to go back on the original attorney, Richard Studenny's (Dick Stupidity) E & O policy for his flawed legal opinions which got us into this mess in the first place?

[Teatownclown]

You can't make the connection or understand the sarcasm  because you are a conservative. 

Most you're  other points are good. Stupidity got this jammed up.

Was AF plant the collateral?