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Judge's ruling allows liquidation of Commander's assets
TYLER, Texas -- A federal judge's ruling has cleared the way for the liquidation of Commander Premier Aircraft Corp.'s assets, leaving Cape Girardeau officials hopeful they will reclaim a portion of the $800,000 the bankrupted company still owes the city in unpaid lease obligations.
Perhaps equally important, they said, it means those assets will at some point be removed from the airport hangar the company was evicted from last October and allow the city-owned building to be better marketed to businesses.
"Once those are out, we'll hopefully be able to get somebody else in there," city manager Scott Meyer said. "It will be a lot easier to talk to people about relocating to that building when their stuff isn't there."
On Tuesday, Judge Bill Parker of the U.S. Bankruptcy Court in Tyler converted the company's bankruptcy status from Chapter 11 to Chapter 7, which allows the airplane manufacturer's assets to be sold. The judge's ruling came seven months after the city filed a motion to convert, during which time the judge allowed four continuances to give the company time to find a buyer.
An unnamed firm in May announced its intention to take over Commander Premier, but the deal never materialized. Meyer also noted that the city had asked for good-faith money from the company that arrived in Cape Girardeau in 2005 amid much fanfare but never manufactured a single plane. The number of jobs company executives predicted at the time also never came to fruition.
"We had some goals for them to meet, and they did not meet them," Meyer said. "Not only did they not meet them, they didn't even come close."
Joel Hartstone of Commander did not return a phone call Wednesday seeking comment.
City officials, who have hired a bankruptcy lawyer in Tyler, did not object to the four previous continuances because they hoped to get more from a new company owner than they might from the sale of assets, which Meyer has likened to "selling for scrap."
One legal hurdle does remain, however. One of Commander's other debtors -- the company owes millions to several entities and investors -- has filed a motion to dismiss the bankruptcy in hopes of refiling, Meyer said. That creditor has a lower priority ranking for repayment, Meyer said. However, the city has a priority claim, Meyer said, because it involves property. But he said it "doesn't seem likely" to him that the motion will be successful. A hearing for that motion has yet to be set.
Since the company's assets are at the 52,000-square-foot hangar at the Cape Girardeau Regional Airport, Meyer said, the city's legal team is trying to decide whether to ask the court to move the case to Missouri. If the remaining legal challenge fails, the court will appoint a trustee to sell off the company's assets, which consists of airplane parts, tools and other equipment.
Councilman Mark Lanzotti has watched the situation unfurl for months awaiting resolution. Getting as much money as possible back for city coffers is important and that should happen now within a structured bankruptcy process, said Lanzotti, who is also a lawyer. But getting the building ready for sale or lease is also key, he said.
"I was glad the judge moved forward with the conversion," Lanzotti said. "That moves us one more step closer to getting the building cleaned out and ready for more aggressive marketing."
Lanzotti also pointed out that the marketing strategy for the building -- built with city dollars initially for the also failed previous Renaissance Aircraft -- won't have to focus on another airplane manufacturer. In early 2011, the Cape Girardeau City Council opted to use $1.69 million to pay off the bonds that were issued in 2001 to build the hangar. The money came from $2 million the city received from Isle of Capri's purchase of 11 acres of municipally owned property.
That decision disentangled the facility from those bond requirements that mandated that it could only be used for airport-related manufacturing because those bonds were tax-exempt.
"I'm not sure what the future holds," Lanzotti said. "But we have a lot more opportunity to sell it than we did when it was restricted to manufacturing aircraft."
Cape Girardeau Regional Airport, Cape Girardeau, MO