Cape files motion to convert Commander bankruptcy to Chapter 7

Thursday, November 10, 2011
Lt. Jerry Bledsoe, left, and Capt. Gregg Ourth with the Scott County Sheriff's Department watch as Dan from Dan's Key and Lock Shop changes the locks on the main entrance of an airport hanger during the eviction of Commander Premier Wednesday morning, October 12, 2011 at the Cape Girardeau Regional Airport. (Laura Simon)

The court filings are still flying.

With a new motion Monday, Commander Premier Airport Corp. has filed yet another legal challenge to its eviction last month from a city-owned hangar at the Cape Girardeau Regional Airport.

But city officials have countered with a few filings of their own -- one which has prompted a hearing scheduled for Tuesday in Texas, where a bankruptcy judge will be asked to convert the company's bankruptcy status from Chapter 11 to Chapter 7.

If a judge agrees, it would allow the sale of Commander's assets to repay company debt, including more than $800,000 to city coffers for unpaid lease payments.

"At every turn, we've looked for the ability to do that," city manager Scott Meyer said Wednesday. "We believe the taxpayers of the city were long-suffering and carried that company. We're going to do everything we can -- and I think that's my obligation to the citizens to do that -- to get every penny that we can."

On Oct. 12, the eviction proceedings seemed to be over. After nine months of legal wranglings, a Scott County judge's order allowed city officials to kick Commander out of the airport hangar and change the locks.

City officials expressed relief at what looked to be an end to the eviction part of the process, though they were still looking to get money owed by Commander from lease agreements that it hadn't made payments on since December 2007.

29 days late

Then, on Monday, Commander filed an appeal to the eviction that has yet to be acted on in Scott County Circuit Court. While Meyer said the city takes every court motion seriously, he doesn't think the eviction will be overturned.

For one, Meyer said, the court process allows 10 days for an appeal. Commander filed its appeal 29 days late, he said, 39 days following the eviction.

"We certainly don't think it's valid," Meyer said.

Executives and a lawyer with Commander did not return phone calls Wednesday seeking comment. The company has remained silent on the issue for more than two months.

Meyer and other city officials said they found the filing Monday baffling, especially since company executive Joel Hartstone told the Southeast Missourian in a September interview that the company was no longer interested in doing business with a community that didn't want them.

"I've stopped trying to think about what their motivation is," Meyer said. "They're just too hard to figure out. I can't spend my time thinking about it."

So Meyer is turning his eye to the city's hearing next week in Texas, where the company is based. Meyer is hopeful the judge will agree with the city in its motion to convert the company's bankruptcy status.

The company filed for Chapter 11 bankruptcy, but any creditor can ask a judge to convert the status. Chapter 11, sometimes called rehabilitation bankruptcy, allows the firm the opportunity to reorganize its debt and try to re-emerge as a healthy organization.

Chapter 7, however, is sometimes called a liquidation bankruptcy. Firms experiencing that form of bankruptcy are past the stage of reorganization and must sell off any nonexempt assets to pay creditors.

"We think they are not viable as a company," Meyer said.

The city's court filing points out that the company's monthly operating report "reflect no post-petition economic activity" and a "post-petition loss." The basic expenses of the company have been funded only by personal loans from company president Gregory Walker. The company also has shown no ability to produce a reorganization plan and no investor has stepped up to buy the company, the court filing says. The company owes its creditors more than $2 million.

While Meyer says he doesn't know why Commander has behaved the way it has, other city leaders used more indicting language.

"I just see it as stall tactics and a lack of integrity," said Cape Girardeau City Council member Kathy Swan.

Swan, who also owns a business, said commitments are made when contracts are entered into. Companies have a legal and moral obligation to fulfill those contracts, she said. If they can't, she said, they should simply be honest.

"You don't keep stalling and fabricating reasons why you can't live up to a contract," she said. "A person of integrity deals with it instead of masking the issues to cloud the picture."

smoyers@semissourian.com

388-3642

Pertinent address:

Cape Girardeau Regional Airport, Cape Girardeau, MO

Map of pertinent addresses

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