"Missouri wants grant money back from Great Plains Airlines"

Tuesday, October 19, 2004

Missouri wants money back from Great Plains Airlines
State says bankrupt carrier owes $236,791 on Ozark Airlines grant 
By Tim McLaughlin 
The St. Louis (MO) Post-Dispatch 


The state of Missouri is seeking to recover $236,791 from bankrupt Great
Plains Airlines. 

The Missouri attorney general's office was expected to file the claim,
including penalties and interest, on Monday in U.S. Bankruptcy Court in
Tulsa, Okla., said Scott Holste, a spokesman for Attorney General Jay Nixon.
The unsecured claim stems from grant money awarded in 1999 to Ozark Air
Lines Inc., the holding company for Great Plains, to make water, street and
sewer improvements at Columbia Regional Airport in Columbia, Mo. 

Great Plains, based in Tulsa, filed for bankruptcy protection in January
after receiving a separate $750,000 in interest-free loans from St. Clair
County to fly from MidAmerica Airport. 

The outlook for creditors appears grim. 

Attorneys for the Federal Aviation Administration recently said the airline
cannot sell its operating certificate to raise money to repay creditors. No
other funding plan has been floated by Great Plains, which could face
liquidation. 

Nixon's office filed an appearance in the case on behalf of the Missouri
Department of Economic Development. Columbia-based Ozark received the grant
money on promises that it would create 21 new jobs at that airport, Holste
said. 

Then owned by an investment group led by a Columbia physician, Dr. Wes
Stricker, Ozark had high hopes for flying routes to Dallas and Chicago.
Ozark expected to generate about $7.5 million in revenue during 2000 by
flying 62,400 passengers from Columbia, according to financial projections
provided to the FAA. 

Ozark projected a net loss of $506,711 in 2000, but with positive cash flow
of $1.3 million, according to the company's application for an operating
certificate with the FAA. 

Boone County, of which Columbia is the county seat, was excited by the
prospect of new regional airline service and approved the grant money for
Ozark. The money, overseen by Missouri economic development officials,
originally came from the federal Community Development Block Grant program. 

In 2001, however, Stricker's group sold Ozark to Great Plains, which
inherited the obligation to the Columbia airport. 

Stricker initially remained on the board of directors at Great Plains, but
he said he later resigned after the airline took a direction with which he
did not agree. 

Amid great fanfare in 2003, Great Plains received loans and other incentives
from the St. Clair County Building Commission, which oversees MidAmerica.
But within months, the airline was in bankruptcy court. It stopped flying,
and creditors seized its planes.


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