What does the bankruptcy of Great Plains Airlines means for Tulsa taxpayers?
Tuesday, March 15th 2005, 10:05 am
News On 6
Great Plains Airlines owes the Bank of Oklahoma some $7-million, but is it the Tulsa taxpayers who will wind up holding the bag? That's the big question as the airline got approval from a judge last week, to liquidate the company in a Chapter 7 bankruptcy.
As News on 6 reporter Steve Berg explains, no one seems sure "who" is responsible for the money. If the bankruptcy was the crash for Great Plains, Chapter 7 was the burn.
The airlines had been trying to reorganize, but now intends to liquidate instead. And there are doubts they can pay back their debts, including a $7-million loan from the Bank of Oklahoma, a loan that was secured by land at the Tulsa International Airport.
Ron Howell was part of an ad-hoc group appointed by the mayor to look at the Great Plain problem and says that airport involvement will probably come back to haunt the city. "When you cut through all of that, the likelihood is that the City of Tulsa will have to somehow come back in, which are our tax dollars, and make up the $7 to $9-million that's now lost due to the Great Plains bankruptcy."
Howell says there are problems with the land as collateral. â€œIt was the belief of one member of our group who has a lot of experience in commercial real estate that the collateral value on that that was remaining was probably insufficient for the loan amount and certainly that the land would not be in a very liquid situation."
That's because he says the land is surrounded on all sides by airport property and not much use to the vast majority of buyers.
The Tulsa Industrial Authority is suing the Tulsa Airport Improvements Board over the loan. Apparently it's believed the Tulsa Airport Improvements Board is obligated to buy the land and pay back the bank. The Improvements Board says that would violate FAA guidelines.