"Hartsfield vendor $1.3 million in debt"

Thursday, April 5, 2007

Airport vendor $1.3 million in debt
Company partially owned by Atlanta mayor's ex-husband
By JIM THARPE
The Atlanta (GA) Journal-Constitution

 
A high-profile vendor at Atlanta's Hartsfield-Jackson International Airport
must tell a court next week how it plans to pay off nearly $1.3 million in
debt, including thousands in unpaid taxes and fees to the state, city and
federal governments.

Franklin and Wilson Airport Concessions, owned by David Franklin and Ron
Wilson, declared bankruptcy just two weeks after state officials issued a
lien against the company for $176,000. The action by the state, which makes
a claim on the company's property, was filed by the Georgia Revenue
Department on Aug. 1.

If the company fails to present a debt-payment plan by Wednesday, creditors
can offer their own plan to the bankruptcy court.

Franklin, the ex-husband of Atlanta Mayor Shirley Franklin, owns 75 percent
of the company and is listed as CEO. He did not return calls about his
bankruptcy filing or the lien. Wilson, who owns 25 percent, referred calls
to the company's attorney but said, "He's not going to have any comment
either."

The company operates three stores at Hartsfield-Jackson - a Bijoux Terner
gift and accessories shop in the atrium, a Bijoux Terner shop on Concourse
A, and Bagmania, a travel and handbag store on Concourse A, airport
officials said.

David Franklin has been doing business at the airport for more than two
decades. His company generated headlines three years ago when he and a team
of investors tried to win a lucrative contract to run a duty-free shop at
Hartsfield-Jackson while his ex-wife was mayor. Shirley Franklin said she
was not involved in the decision.

The airport initially sided with David Franklin's company, then backed away,
at which point he sued to force the city to grant him the duty-free shop. A
Fulton County court ruled against his bid last year.

David Franklin's airport dealings have been a public relations headache for
the mayor, who vowed to clean up city government and any remnants of
cronyism in wake of her predecessor, Bill Campbell, who went to prison for
tax evasion after heading an administration fraught with allegations of
corruption.

Mayor Franklin declined specific comment on her ex-husband's problems.

"I have been divorced since 1986 and have limited contact with my former
husband and absolutely no contact with him on city matters," the mayor said
in a written statement.

The mayor and David Franklin list their son, Cabral Franklin, as an officer
in separate companies they control, according to state records.

Those filings show that Cabral Franklin is listed as chief financial officer
and secretary of the mayor's consulting company, Clarke-Franklin &
Associates Inc., which is held in a blind trust while the mayor is in
office. Cabral Franklin is also listed as a registered agent and secretary
for another company controlled by David Franklin, David M. Franklin &
Associates, Inc.

Bankruptcy records indicate Franklin and Wilson Airport Concessions Inc.
paid Cabral Franklin $8,068 in the year before the bankruptcy filing and
lists his title as "VP, Budget & Planning." Those records also show the
company paid Kali Franklin - daughter of the mayor and David Franklin - $635
during that period.

Bankruptcy court records indicate David Franklin's company now owes $120,000
in unpaid state taxes, $3,233 in federal taxes and more than $7,600 in
licensing fees to the city of Atlanta.

The Department of Revenue lien shows David Franklin's company owed the state
$176,000 in August 2006, including $93,000 in unpaid state taxes, $12,000 in
interest and $40,000 in penalties. The amount of state taxes owed differs
between the lien and the bankruptcy filing because they cover different
periods of time.

Essentially, the company collected 4 cents in state sales tax on every
dollar spent by customers, but never sent it to the state government,
according to the revenue department.

The remainder of the liabilities - which comprise the largest portion of the
debt - are for money owed to long list of private companies, including
merchandise suppliers, office supply vendors and construction firms.

Bankruptcy records indicate David Franklin's airport company grossed $2.96
million in 2004, $2.93 million in 2005 and had taken in $1.75 million by the
time of his Aug. 14, 2006, bankruptcy filing.

Franklin lists the company's total assets at $314,923 and total liabilities
of nearly $1.3 million in the filing.

Airport officials said they were unaware of the state lien against
Franklin's company until a reporter made inquiries. The lien came to light
when The Atlanta Journal-Constitution filed an open records request with the
state Department of Revenue for any unpaid taxes owed by Hartsfield-Jackson
vendors.

"This issue with their (state) taxes is between them and state government,"
airport spokesman Herschel Grangent said. "As far as we know, they have met
all their obligations to us."

Every year more than 85 million passengers pass through Hartsfield-Jackson -
the world's busiest airport - spending millions of dollars on everything
from food to T-shirts to luggage.

David Franklin's company was identified as having unpaid taxes during a
sweep of airport vendors by the state Revenue Department last year.

Revenue Commissioner Bart Graham, who runs the department, declined comment
on specific cases but said in general of the liens, "We don't frivolously do
this."

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