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.

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.

Reports on at least one forum as well as the JournalNow.com state that PACE Airlines has had trouble with payroll for at least a month. Multiple post state that payroll was missed in July prior to July 4th along with several pay periods since then. This past week CEO William Rodgers apparently told employees they were working on financing and debt issues but couldn’t confirm anything specific as to expected cash flow.

William Rodgers took ownership of PACE Airlines back in June of this year after services such as Hooters Air closed up shop. Soon after PACE Airlines registered the trade name of Allstar Airlines as is clearly aiming to provide further services to sports teams much like it did back in the day for the Charlotte Hornets with special all First Class seating 737’s. Paperwork shows in July they notified D.O.T. of the name change and the de-registration of Hooters Air and prior information shows Rodgers has a history with wanting to provide services to professional sports.

From the postings found in various forums it appears services are still going on along with flights however one has to wonder how long that can last with employees not getting paid. As one poster said, “I have been in this industry for over 11 years and have never worked for free.”  If this is the case and wages continue to be delayed it could spell more trouble as both State and Federal officials will get involved. I am told that as cash flow becomes a problem the FAA can require payment on demand for ramp fees along with fueling companies going COD both of which make day to day operations more difficult.

Searches for data on William Rodgers as well as PACE Airlines resulted in several disconcerting findings such as the website PaceAirline is parked or doesn’t exist and FlyPACE.com is now redirected to an under construction site at AllStar Airlines.  As one poster pointed out court records show a troubled past for a William C. Rodgers in the Missouri Court System but some of those records are clearly not related to the same person. I also located a response from the New Orleans Lakefront Airport dated October 23, 2008  in response to a proposal from Mr. Rodgers for a “United Fan Complex”, a charter business with hotel and VIP services.

Hoping all goes well for the employees at PACE as I myself know the problems that can result from slow payroll from an employer.