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Mesaba paid MAIR 122 MILLION the last 3.5 years

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Buck_Boley

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Feb 12, 2006
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AP
Mesaba: $122M in Payments Were Proper
Thursday October 5, 7:57 pm ET
By Joshua Freed, AP Business Writer Parent of Bankrupt Mesaba Says $122 Million Payments by Airline Operator Were Proper

MINNEAPOLIS (AP) -- Regional airline operator MAIR Holdings Inc. on Thursday asked a judge to declare that more than $122 million it received from subsidiary Mesaba Aviation Inc. was properly paid.


In the 3 1/2 years leading up to Mesaba's bankruptcy protection filing, it paid more than $122 million to MAIR in dividends and management fees.

Those payments have irked the unions and creditors of the feeder for Northwest Airlines Corp. A committee of Mesaba's creditors has gotten permission from a bankruptcy judge to pursue possible claims against MAIR for the payments.

Mesaba paid $111.2 million in dividends to MAIR from April 2002 until Nov. 30, 2004, beginning with a single $54.2 million dividend paid April 30, 2002. Mesaba also paid management fees to MAIR totaling nearly $11 million from 2003 until July 11, 2005, three months before Mesaba followed Northwest into bankruptcy protection.

MAIR has stayed out of bankruptcy, even though Mesaba provided most of its revenue and nearly all its profit.

In the court filing on Thursday, MAIR argued that Mesaba was solvent and had no expectation that it couldn't pay its bills when it made the payments. And it said the Mesaba board decided not to pay a dividend in February 2005 after reviewing its expected cash flow for the rest of the year.

"The dividends and fees Mesaba paid to MAIR are legitimate, appropriate and legal," MAIR Chief and Executive and President Paul Foley said in a written statement. "The public speculation that these dividends and payments were improper is unsupported by the facts, by the law, and is damaging to MAIR. We are asking the court to rule on this matter and put it to rest once and for all."

Tom Wychor, head of the Mesaba branch of the Air Line Pilots Association, said the bankruptcy judge barred Mesaba unions from making the payments an issue when Mesaba argued for permission to reject its union contracts.
 
Carl Polhad and his boys at work again
 
Mesaba will never be mesa, maybe runner up, but the people who work there are great. They are trying there hardest to stay above mesa level BS.
 
I'd love to see MAIR's arguments as to why the monies paid are legit.

Judge: Mr. Fooley, errr, Foley, what did Mesaba receive for the $122M?
Foley: Ummm. Stuff?
Judge: "Stuff?" Could you be more specific?
Foley: Aviation stuff?
Judge: I see. . .
 
The company is fond of saying how Mesaba is losing 1 million dollars a week.
Maybe if they didn't blow 122 million on MAIR, 10.6 million dollars on lawyers/management/ consultant fees, and subsidize Big Sky, Paul Foley and Carl Pohlad they would have just a little more cash. Just a thought.

The problem around here is there are too many hands in the cookie jar and they aren't giving anything back.
 

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