Tenant details offer to settle $7 million debt, operate Rock Airport and Business Park
A company that has filed a competing reorganization plan for bankrupt Rock Airport and Business Park says it intends to keep the airport in operation.
Management Science Associates, a business park tenant, was in court on Monday to defend and provide information on the financial aspects of how it would pay creditor claims of about $7 million.
Local officials, the airport's pilots association and airport president Rock Ferrone have worried that MSA, or its subsidiary Alaskan Property Management, would shut down the airport. Alaskan Property has offered to buy the property for $6 million.
“We agreed that we would find an appropriate party to operate the airport,” said David Rudov, an attorney for MSA/Alaskan.
PennDOT has given millions in grant money to the airport, which it feels is an “economic linchpin” in the area and should remain open, PennDOT attorney Michael Alsher said.
The agency's stance is that if the new owner would shut down the airport, it would be liable to repay $9.2 million in grant money that the state Bureau of Aviation gave for airport improvements.
MSA's plan is based on the sale of the airport to Alaskan for $6 million. MSA would provide additional money to satisfy all claims, including back taxes and an additional $1 million sought by Huntington National Bank for interest and attorney fees that have accrued on top of its initial $3.3 million mortgage lien and claim.
Rudov said their plan offers cash to creditors, which also includes First Commonwealth Bank and the Allegheny County Redevelopment Authority, compared to Rock Airport's reorganization plan, which relies on proceeds from a natural gas lease with Huntley & Huntley.
“This is a plan that is highly feasible,” Rudov said of MSA's offer. “It is not based on a promise of projected revenue of a gas lease somewhere down the line.”
However, Bankruptcy Court Judge Carlotta Böhm said she wants MSA to provide more information on a number of issues, including:
• Its intention to operate the airport and how the grant liability would be satisfied if the airport is closed after the plan goes into effect.
• Where the money to fund the plan is coming from and provide proof that MSA and/or Alaskan has the finances available to be able to pay creditors.
• Why the company believes it has standing in the case to file a reorganization plan, a step that is usually reserved for parties that are owed money in the case.
Robert Lampl, Rock Airport's attorney, is challenging MSA's ability to file a reorganization plan.
MSA and Rock Airport have been in litigation over numerous issues, most notably regarding the company's use of the business park's power grid. Each side has also accused the other of improper conduct.
Lampl contends that MSA recently bought out a $6,630 claim against Rock Airport from the Pricilla Grden Living Trust in order to thwart the airport's reorganization efforts.
The claim originated when an Allegheny County judge ordered Rock Airport to pay for damage caused when airport workers went onto the property next to the airport and cut down trees.
Payment has been suspended since 2009, when the airport filed for bankruptcy.
In an effort to take away MSA's stance that it has a claim, Ferrone sent full payment to MSA for the Pricilla Grden trust claim on June 17 — the day after a hearing at which MSA said it was going to file a reorganization plan.
Rudov argued that even discounting the Grden Trust claim, it still has standing to file a plan because it has a significant financial stake in the outcome of the case and would also be significantly impacted by Rock Airport's plan.
Judge requests more info
The court is treating the sale and two plans as three separate issues, which means they're all competing against one another.
As a result, MSA's plan could be accepted over Alaskan's purchase offer or vise versa.
The judge also has the option of accepting Rock Airport's plan or a competing, higher purchase bid from another entity.
That's one issue that Böhm said she wants MSA to address in a revised plan that is to be submitted by the end of the week.
“There is nothing in the disclosure statement that contemplates what happens if Alaskan is not the successful bidder at sale,” Böhm said. “What happens if they are? Will their plan be withdrawn?
“I think a lot of necessary changes need to be made before this can be approved.”
Böhm scheduled a July 21 hearing on the matter.
Jodi Weigand is a staff writer for Trib Total Media. She can be reached at 724-226-4702 or email@example.com.