FLORIDA COMPUTERS STOLEN FROM AIRLINE OFFICESBusiness: Lawsuits, troubles pile up for SoutheastLawsuits, troubles pile up for Southeast
Creditors keep coming after the defunct airline. Among them is Pinellas County, which has sued for $100,000 in unpaid rent and fees.
By CANDACE RONDEAUX, Times Staff Writer
Published February 4, 2005

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Pinellas County's lawsuit seeking nearly $100,000 in unpaid rent and fees from Southeast Airlines is only part of a complex web of legal actions that entangles Southeast and stretches from coast to coast.

"There's so many layers to this Southeast thing that God knows how it's going to sort itself out," said senior assistant county attorney Michael A. Zas, who filed the county's suit last month. "This thing is probably going to get pretty ugly until things are resolved."

Last week, Sen. Charles Schumer, D-N.Y., said United Bank & Trust Co. of St. Petersburg has paid more than $7-million in credit card refunds to Southeast's customers. The Largo air carrier's closing on Nov. 30 left its 364 employees out of work and thousands of passengers confused about how to get refunds.

"We were informed that refunds were given to customers after pressure Senator Schumer put on the banks," Schumer spokesman Israel Klein said Thursday.

On Dec. 28, United Bank sued Southeast, alleging more than 9,400 Southeast customers had sought an aggregate of $3.1-million in charge card refunds between Dec. 3 and Dec. 21 that would result in a $2.9-million overdraft of Southeast's bank account.

United Bank vice president Susan Blackburn declined to comment, citing the bank's ongoing litigation against Southeast.

Schumer has asked United Bank and Valley National Bank, the New Jersey bank responsible for holding Southeast ticket revenues in escrow, to disclose details about how many Southeast passengers have unused tickets and how much money is in Southeast's accounts. Meanwhile, U.S. Department of Transportation officials say they are trying to sort out how many customers are due refunds.

"We're looking into whether the proper steps were taken before the company closed but we don't have all the information yet," said DOT spokesman Bill Mosley.

Valley National Bank officials said Thursday they are cooperating with the DOT's inquiry. Southeast has about $620,000 in its account with the New Jersey bank, said Valley National spokeswoman Catherine Erickson. She said a number of Southeast's creditors have approached the bank for payments.

"There's not enough money to satisfy all the claims," Erickson said. "If the Department of Transportation directs Valley National to release the funds or a court makes an order, we'll happily release the money. But we want to make sure it gets into the proper hands."

Several of Southeast's creditors have their hands out. On Dec. 17, a New York jury awarded $3.7-million to Aviation Services International, a company that maintained Southeast aircraft, records show. On Dec. 3, the Lehigh-Northampton Airport Authority won a judgment of more than $573,000 in fees and back rent, records show. In April, a California firm won $4.6-million in a lawsuit that claimed Southeast was behind on its loan payments. Meanwhile, the list of Southeast creditors who have sued the defunct air carrier in Pinellas County is growing, records show.

Figuring out how much Southeast owes its customers and creditors might not be easy. Many of Southeast's records have disappeared, according to a report prepared by Oscher Consulting, the Tampa court-appointed receiver tasked with conducting an inventory of Southeast's financial records.

Oscher's report said many of the airline's records were missing and several bags of shredded documents were found in Southeast CEO P. Thomas Kolfenbach's office during a Dec. 22 visit. The report also said servers for the company's computer system had been removed.

When United Bank asked Southeast for records contained on the airline's computers, Southeast said its computers had been repossessed. But the St. Petersburg bank's lawsuit contends Southeast officials changed their story, saying the company's computers had been stolen in a Dec. 5 burglary at the company's Largo offices.

Attempts to reach Kolfenbach this week were unsuccessful. Reached Thursday in Virginia, Southeast's former vice president of administration and general counsel Terrence Haglund said he spoke to Kolfenbach when the CEO called him during the New York trial but had heard nothing about his whereabouts since.

Haglund said he no longer works for Southeast but said he was aware of the United Bank suit. Haglund said he didn't know much else about the company's dealings after its closing in November.

Largo police Detective Randy Chaney confirmed Thursday that Southeast employee Amine Erres reported about a dozen computers had been stolen from Southeast's offices sometime between Dec. 4 and Dec. 5.

Chaney said his investigation into the break-in is ongoing. The detective said there's no suspect, and said he's had difficulty reaching Southeast's executives and getting company records.

Oscher managing director Steven Oscher said his company is continuing its review of Southeast's records.

But he said his role in sorting out Southeast's tangled finances is "pretty narrow" and declined to comment further.

News of the county's lawsuit comes a week after another troubled airline carrier, ATA, said it plans to end its operations at St. Petersburg-Clearwater International Airport in April.

Airport director Noah Lagos said Wednesday the departure of ATA and Southeast put the airport in an awkward position and reflect the volatility of the nation's airline industry.

"You have major carriers in bankruptcy, including ATA so this is not the best of times to be going out and recruiting new airlines," Lagos said.

Times staff writer Jean Heller and researcher Kitty Bennett contributed to this report. Candace Rondeaux can be reached at 727 771-4307 or rondeaux@sptimes.com