Court Appointed PACE Bankruptcy Trustee, Edwin Allman III, has subpoenaed  for seven Pace accounts held by Platte Valley Bank of Platte City, Mo. It appears Allman is still trying to unravel who owns what and who owes what in the case of the imploded PACE Airlines. Allman states he considers the owners to be William Rodgers and Lee Booth although earlier reports said Rodgers had signed away his ownership.

If anyone is following the case and has taken the time to pull any public records please feel free to comment or upload anything you have.

In what is the final act for PACE Airlines Judge Thomas Waldrep has entered PACE into involuntary Bankruptcy. On December 2, 2009 multiple creditors filed a petition to start the liquidation of PACE Airlines almost a year and half after PACE stopped paying it’s lease agreement with Smith Reynolds Airport. Interesting enough nobody representing PACE Airlines showed up at the December hearing.

We posted back on October 27th that it had been reported that CEO William Rodgers had signed away any interest in the company. What information was available appeared to point to Lee Booth had taken various assets and was likely setting up shop in Burlington however that is about all that was known or maybe rumored would be better. It appears the attorney appointed by the courts to handle this case is as much in the dark as everyone else as he was quoted as saying, “I will examine corporate officers under oath to determine the ownership.” Edwin Allman III who was appointed as Trustee further went on to say if he can recover any assets the legal fees will be paid first then creditors with the 400 or so employees owed back pay “would be pretty high up" the list of creditors”. While I would like to think he is right I have enough experience with things like this to know employee back pay will be considered  unsecured debt while the multiple companies owed $10 million or more will likely be seen as secured debt  and secured debt always gets paid first.

Of course there are still charges against William Rodgers for failure to pay insurance premiums while months later the N.C. Labor Department is still “investigating” the failure to pay wages.

My last comment on this is at what point is the Airport Commission called to the carpet on allowing PACE to go a year without paying it’s lease obligations? Remember the Airport Commission is also in hot water for allowing it’s contractor in charge of runway expansions per a 1997 Grant to not pay it’s subcontractors. I’ve not heard or seen anything else on this and the Journal certainly hasn’t covered this.

It appears former CEO William Rodgers has signed away any interest he has in PACE Airlines. In unconfirmed reports Lee Booth has taken what assets were left, primarily FAA Certifications down to a building in Burlington. Former V.P. Stuart Carnie was quoted as saying Rodgers has signed over his interest in the company last week to undisclosed “investors” but all fingers point to Lee Booth. It has been posted on other sites that Booth was the primary investor in PACE near the end and has a history in the aviation field from his ownership of Taylorcraft, a small personal aircraft company he moved to Greensboro back in 1988. Of course rumors abound however the general belief is that Rodgers sold part of PACE to Booth back in September and it was the ownership by Booth that kept an interested party in Dallas from assuming PACE as a whole. The party or group in Dallas wanted 100% ownership and Booth either didn’t want out or wanted more for the assets causing the deal to fall through.

Stuart Carnie further went on to say he had revoked his interest in Rodger’s bond resulting in William Rodgers being rebooked into Forsyth County jail where he remains. This Post has been edited at the request of a person claiming to be Harlan Cobert and due to the content of that email request it is within reason to believe such request was made by him. Until such time as the objection that was raised is shown to be factual by verifiable reference any reference to that issue will be removed from this thread and site.

A “Staff Writer” posted an editorial about Smith Reynolds Airport which was so poorly written it almost looked like somebody just grabbed paragraphs from a dozen other articles and pasted them together. Now I will admit I’m no journalism major but I also don’t pretend to be unlike it appears some of those at The Journal are.

Pace owes the airport commission about $890 million in lease payments. The commission is forcing the company to vacate.

Well no they don’t. The number is closer to $900,000.00 for back lease payments of $145,000.00 per month. I guess somebody can’t count zeros but I’m not surprised with the education system. The better comment on the above would have been to question why the Airport Commission allowed PACE to get that far behind without putting in protections to collect on the outstanding balance. Granted Falcon Air is still in the mix and if something is going on behind closed doors to divest PACE Air out of it’s debts to Winston-Salem so Falcon can come in on the cheap and rehire workers are lower wages only time will tell.

Better yet if I remember right it was this same Airport Commission that in 2003 pushed Timco out of it’s space at Smith Reynolds which it was sub-leasing to PACE in order to get PACE to setup permanent camp here. The deal was all about getting a commuter airline back at Smith Reynolds by having PACE run flights from Winston-Salem to Gary, Indiana.

But perhaps an innovative marketing effort, and yes, maybe even some incentives, could attract a regional carrier for business and pleasure flights.

Smith Reynolds Airport is starting a strategic analysis to map its future course, and consideration of bringing back a regional carrier should be part of that effort.

The anonymous poster of this editorial goes on to say both the Airport Commission as well as the City should be looking at bringing a regional carrier to the airport and to do so by even including offer incentives. Well to whom it may concern I think the use of Tax Payer Dollars for private business is a non-starter. Unless the city wants to backdoor another $50 million in private business funding that the public didn’t want or vote for the odds of having a citizen approved incentive is DOA. As far as regional or low cost airlines coming to Smith Reynolds that is just a non-starter and not worth spending a dime on. A quick look at PTIA shows that these types of carriers cannot make a business out of servicing this area. Of course one of the reasons they can’t make a business at it is this area is losing it’s middle class adults who are the ones which could be taking those flights. The chasing after Dell’s scraps cost this area millions both above and under the table yet it has provided little in the way of growth and certainly not the promised growth the Mayor and everyone else was citing to get approval of the incentives.

Winston-Salem’s image is changing. A nationally known biotech research park, a major computer manufacturing plant and a state-of-the-art downtown baseball park — not to mention a dramatically enlivened downtown business and entertainment district — once were the stuff of dreams. Our local leaders chose not to wait for fortune to find them; they went after it.

About all I can say is, If You Say So. You may want to look over my post from September 18 concerning the McKinsey $ Company report that is coming out on Winston-Salem which shows Winston-Salem is not progressing but failing behind similar cities.

U.S. Equal Employment Opportunity Commission has filed a lawsuit against Winston-Salem based PACE Airlines. The suit contends Chau Nguyen, an Asian flight attendant, was fired after she complained that only “white” workers were being promoted. The case goes back three years to the prior ownership of Robert Brooks of Hooters fame and the days of Hooters Air. It what can only been seen as piling on the EEOC has been trying to resolve the case for years and filed the suit only after William Rodgers arrest on Felony charges yesterday for failing to make employee insurance payments or provide the required 45 days notice of insurance termination.

The writing was pretty much on the wall for this one. N.C. Department of Insurance charged William Charges Rodgers with failing to make insurance payments for employee insurance coverage saying he knowingly terminated his group health insurance without providing the required 45-day notice to his 337 employees. William Rodgers is CEO of Winston-Salem’s PACE Airlines which he bought several months back. NCDOI news release (see below) states Rodgers was arrested at PTIA this afternoon although they did not say if he was coming or going from the airport however WRAL in Raleigh reports Rodgers had just arrived at PTIA. 

An informational meeting for Pace employees has been scheduled for Tuesday, Sept. 29, from 10 a.m. to noon at the Lawrence Joel Veterans Memorial Coliseum. More information can be found at the NCDOI’s Web site.

Stuart Carnie was quoted as saying, “The wrong man is in handcuffs. The previous owners of Pace did not pay the premiums, we paid the past three months insurance premiums to Blue Cross-Blue Shield. We just wrote a check last week for $223,000." You may remember the name Stuart Carnie as he is the PACE Executive that had his vehicle broken into and a GPS stolen which Rodgers citied as one of the reasons he was suspending operations, to protect his employees from violence.

PACE Airlines is past due on it’s lease agreements with Smith Reynolds, behind in FAA fees and has as much as $20 million in outstanding bills many of which date back to before Rodgers bought the troubled outfit. Recently they lost their maintenance contract with Continental Airlines with the rumor being Continental was concerned with the financials and the possibility of getting equipment stuck in the mix or plans stranded at Smith Reynolds Airport.

In 1999 Mc­Kinsey & Company was commissioned to study the Winston-Salem area and report how the area stacks up against similar cities as well as what objectives need to be met in order for future growth. Of course this was at the start of the Winston-Salem Alliance and it’s hiring of Allen Joines whose prior job at the time was Winston-Salem’s Assistant City Manager for Economic Development not to mention being a director for both Downtown Development Corp. and Winston-Salem Business Inc. The follow up on that report coming ten years later will show not only has Winston-Salem not met goals but is falling behind other cities of similar size and background.

According to Don Flow the new report will say Winston-Salem has fallen behind in three areas, per-capita income, population growth and quality of life. So here we are ten years later, the same business leaders running all the same clichés, The Chamber, The Winston-Salem Alliance with Allen Joines taking over the Mayor’s office yet the report will say nothing had changed for the better, in fact it’s worse. Of course we have Dell now, oh yeah they have yet to meet their hiring goals and laid off hundreds. Oh wait we have a $24, no scratch that $42 million dollar stadium, oh wait scratch that, make that a $42 million dollar incomplete mud bowel. But we have Fedex, oh wait they not hiring as expected either. Well darn there is of course a growing airline service company at Smith Reynolds, oh I forgot PACE Airlines just shut it doors.Well that’s ok because we have United Guaranty, oh I guess I forgot again as they laid off how many so far?

So let’s see, ten years later, same business leaders running the same groups and a Mayor running unopposed. Sounds like Same Song and I expect the Same Dance from these “leaders”. I guess the only change this time around will be there won’t be a Bud Baker to say he doesn’t think the Winston-Salem Alliance would be around in 3-5 years.

In what appears to be a final move before the end the owner of PACE Airlines, William Rodgers Sr., suspended all operations citing an instance of vandalism to the car of Stuart Carnie, a top executive. After weeks and weeks of delayed or missing paydays and a layoff of as many as 215 this past Tuesday further troubles started this week with investigations by U.S. Department of Labor, the N.C. Employment Security Commission and N.C. Department of Insurance. The U.S. Department of Labor is looking into possible wage violations and the Fair Labor Standards Act while the N.C. Department if Insurance is looking into the failure of PACE Airlines to make premium payments to insurers for employee insurance when deductions from paychecks had been made for those cost.

The memo sent out to employees citied specifically the incident to Mr. Stuart’s car which was located at the Residence Inn on North Point:

"With consideration of everyone’s personal safety being first and foremost at all times, and not knowing exactly what party has perpetuated this personal attack on Mr. Carnie, or who might be next be attacked, all non-essential personnel will be relieved of their duties and responsibilities, effective immediately upon notice by their supervisor,"

The use of this “personal attack” as cause for the shutdown has been called into question by many of PACE’s employees on various Internet forums and one has to question this considering the “vandalism” was a broken passenger window and theft of a GPS unit left in the car. Of course North Point being North Point there were no less than a half dozen Police reports for the same area from Drug Arrest, Shoplifting and Police Warrant service. The “LARCENY FROM AUTO” one just one of many reports Winston-Salem Police filed in an area some would say has a history of such issues. In fact a similar crime occurred in May at the same address with exactly the same results, a broken passenger window and stolen GPS as well as in April a few doors down. Seems there may be a slight pattern here but I’m no crime expert, ha ha.

According to further reports all aircraft owned by PACE Airlines have been recalled to Winston-Salem except for two one of which is awaiting an FAA check while the other will return at the first of the week. Maintenance contracts with Continental Airlines have been cancelled along with multiple deals for various charters or aircraft contracts. Lastly FalconAir has posted a job listing for Aircraft Mechanics in Winston-Salem on the same day PACE more or less closed their doors, interesting.