Horry County Department of Airports won’t be among those wondering if they’ll ever get paid money they are owed from bankrupt Direct Air.
The airports department will get at least some of the nearly half-million dollars it is owed by the Myrtle Beach-based carrier thanks to a bond the airport required of Direct Air when it started operating at Myrtle Beach International Airport in 2007. U.S. Bankruptcy Judge Melvin S. Hoffman recently ruled that the bond isn’t considered property of the bankruptcy estate, so the ongoing Chapter 7 liquidation proceedings shouldn’t hold up payment to the airports department through that bond.
But the airports department -- one of numerous airports, passengers and other vendors owed money by Direct Air -- won’t get all it’s owed. It will receive $151,000 through the bond, underwritten by Platte River Insurance Co. in Madison, Wis. Direct Air, which abruptly stopped flying and filed for bankruptcy in March, owed the airport $441,267.17, according to court filings. The airport budgets for some unpaid debts, which will cover the rest of the money it’s owed, said Mike La Pier, the county’s airports director.
“We are confident the airport will receive the money through the bond,” he said. “It’s just a matter of getting the bond issuer to satisfy that bond...I don’t think there will be a problem.”
Platte River Insurance Co. hasn’t yet cut the check for the airports department, claims adjuster Pat Framke said Wednesday afternoon.
“Our attorney has asked the airport for some clarification,” she said. “We are just waiting for a response.”
All carriers at Myrtle Beach International Airport are required to have a bond to secure performance, La Pier said. Carriers have to have a bond that covers two months of payments for rent, landing fees and other expenses to the airport.
“At least we had a solid security deposit,” La Pier said. “We’ve got at least some kind of parachute.”
Attorneys and investigators have been trying to sort through Direct Air’s financials since the carrier filed for bankruptcy four months ago. Direct Air had accumulated between $10 million and $50 million in debt, owing its carriers, the airports where it operated, oil companies and TV stations, according to a list of the largest creditors filed with the court. Liabilities include $3.9 million in trade debt, $1 million to various airlines, $1.4 million in state and federal taxes and $970,000 in security costs to the U.S. Department of Transportation, according to court documents.
About 1,310 claims for money owed have been filed with the bankruptcy court, totaling $6,565,375.47.
Some accounts, including an escrow account, set aside to protect consumers have been found to be way short of what is owed. Investigators have been trying to determine what happened to that money.
Those owed money are waiting to hear how much, if any, they’ll get through the liquidation of the company’s assets. Some customers have withdrawn claims after getting reimbursed through their credit card companies, court filings show.
Myrtle Beach International Airport still is in line to recoup more of what it’s owed through the liquidation, but La Pier isn’t counting on it.
“If we get anything [from the liquidation of assets] it will be more of a surprise than anything,” La Pier said.
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