Trumbull Co. loses all of $200K it had loaned Ready Air

Creditors, attorneys and accountants split $101,608, but creditors were owed $849,399.

By Ed Runyan

VIENNA — It took more than three years for a U.S. Bankruptcy Court ruling to confirm what many had suspected — Trumbull County has lost all the $200,000 it loaned to a service provider and fuel handler at Youngstown-Warren Regional Airport in 2005.

If there is any good news in the final report filed by Robert Slone, trustee for the Ready Air bankruptcy, it is that the Western Reserve Port Authority, which runs the airport, will get $11,209 of the $104,186 that it was owed for unpaid rent and legal fees.

“We were one of the few that got paid,” John Masternick, chairman of the port authority, said Wednesday. “We were low on the totem pole. I’m surprised we got paid at all.”

Slone’s June 30 report, docketed on the bankruptcy court’s Web site July 8, said Ready Air had $101,608 in assets.

Most of those assets were distributed to Slone, ($9,130), Slone’s attorneys ($20,460), an accounting firm ($28,324), other attorneys ($14,615) and three of the parties that Ready Air owed money to: the port authority ($11,209), Johnston Aviation ($9,711) and Robert Moosally of New Castle, the company’s owner ($9,759).

In all, creditors were owed $849,399. They included the following parties that did not receive any money: the Trumbull County Planning Commission ($200,000), FH Partners, the company that assumed control over a $400,000 Small Business Administration-backed loan made by Sky Bank ($255,162), Air BP Epic Aviation LLC ($32,469), MS Consultants ($1,500), American Loan Co, Inc. ($77,420), Lyden Oil Co. ($1,054), Ohio Edison ($5,322), and Alpha Aircraft Charter ($7,767).

Johnston Aviation of Lorain, which took over Ready Air’s operations for a couple of months after Ready Air filed for bankruptcy in March 2006, got $9,711 in the bankruptcy, but it was owed $94,678.

The Cortland company Ross Development was part of the bankruptcy case in the months after it was filed, seeking to be repaid the $140,000 it loaned Ready Air. In the final report, Ross Development is not mentioned. A call to Ross Development was not returned.

Slone, reached by telephone Tuesday, said the attorneys, accountants, trustee and three creditors are the only ones who received any of their money back from the bankruptcy because there were so many more creditors than dollars to give back.

Ready Air became a fixed-base operator at the airport in 2004, selling fuel and services to aircraft operators and competing with the other service provider, Winner Aviation.

Trumbull County commissioners Paul Heltzel, Dan Polivka and James Tsagaris approved a $200,000 loan to Ready Air in September 2005 that was designed to create 18 new jobs over three years and renovate Ready Air’s hangar.

The money came from funds administered by the Trumbull County Planning Commission from its Revolving Loan Fund — money secured from state and federal grants to help businesses expand.

Ready Air made only one payment on the Trumbull County loan in November 2005 and then defaulted on the loan by not making another payment.

Ready Air stopped paying rent to the port authority in fall 2005, causing the port authority to threaten to evict Ready Air if it didn’t pay.

In December 2005, Moosally complained that the port authority was giving preferential treatment to Winner and asked the Federal Aviation Administration to investigate. Moosally said he would also continue to withhold rent payments over the fairness issue.

After investigating, the FAA declined to act, saying it was satisfied with the port authority’s answer to Ready Air’s complaint.