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County counsel, outside counsel outline fallout from Silver Airways bankruptcy and protections secured for airport funds
Summary
External counsel briefed commissioners on Silver Airways' bankruptcy, court actions to protect airport PFCs, FAA shutdown of the carrier over safety issues, conversion to Chapter 7 and a likely 1–2 year trustee investigation into pre‑ and post‑petition finances.
Outside counsel for the airport described a sequence of bankruptcy court actions taken to protect airport funds and compel payments from the debtor airline. Eric Smith of Kaplan Kirsch said the airport pressed the debtor and the USDOT when passenger facility charges (PFCs) were not segregated and that litigation in bankruptcy compelled administrative priority payments.
Smith told the board that the debtor’s operations were suspended by the FAA after safety concerns, that the case later converted to Chapter 7, and that a trustee will investigate what occurred pre‑ and post‑petition. "They were using airport money to fund operations," Smith said in summary of the court record and filings. He added the investigation could take one to two years; recovery of pre‑petition claims is uncertain.
