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Sunday, April 20, 2014

White says Swift Air’s 3 execs ‘not fulfilling their obligations’

Attorney Michael A. White has asked the federal court for permission to withdraw as counsel for the three executives of Swift Air LLC that Saipan Air Inc. is suing, saying they have failed to pay him for his legal services.

In a motion for leave to withdraw filed on Tuesday, White disclosed that his clients, Donald A. Stukes, Jeffrey Conry, and Boris Van Lier, have “failed substantially” to fulfill their obligation to him for his legal services.

White said he sent an email on Jan. 25, 2014, to the Tuggle Duggins firm in North Carolina, which is principal counsel for Stukes, Conry, and Van Lier. In that email, White said he gave the defendants notice that, if their obligation to him is not fulfilled within the next two weeks, he would ask to withdraw as their lawyer.

“Notwithstanding this warning, the obligation of defendants to the undersigned remains unfulfilled,” he said.

U.S. District Court for the NMI Chief Judge Ramona V. Manglona recently denied a motion to stop Saipan Air Inc. from pursuing its $50-million racketeering lawsuit against Stukes, Conry, and Van Lier.

The defendants asserted that Saipan Air Inc. is barred from continuing its lawsuit against them due to the Chapter 11 reorganization plan of Swift Air Inc.

Manglona, however, ruled that the language of the reorganization plan is far short of clear enough to alert Saipan Air that, by agreeing to the plan it was abandoning its lawsuit. The judge said the plan is ambiguous and cannot be the basis to bar Saipan Air’s claims.

Stukes, Conry, and Van Lier were employees, officers, or advisers of Swift Air, an Arizona corporation. Conry was chief executive officer, Van Lier was director of operations, and Stukes was chief restructuring officer and also an employee of ASI Advisors LLC.

In April 2012, Saipan Air and Swift Air entered into an agreement for Swift Air to provide Saipan Air with aircraft, crew, maintenance, and insurance.

Over the next two months, Saipan Air paid a total of $1.267 million to Swift Air and provided a $524,000 letter of credit to secure delivery of the aircraft by July 1, 2012.

On June 21, 2012, Van Lier, acting on behalf of Swift Air, terminated the agreement in a letter to Saipan Air.

Less than a week later, on June 27, Swift Air filed for bankruptcy in the District of Arizona under Chapter II of the Bankruptcy Code.

In response, Saipan Air took action on two fronts. In Arizona, it participated in the bankruptcy case. In the initial filings, Saipan Air was listed as Swift Air’s second-largest unsecured creditor.

Swift Air’s chief operating officer, Adam Ferguson, chaired the creditor’s committee. On July 8, 2012 Ferguson swore out a declaration in support of its $1.276 million claim.

Ferguson alleged that a series of broken promises, misrepresentation, and outright lies by Conry, Van Lier, and other agents of Swift Air induced Saipan Air to enter into the agreement.

Around the same time, Saipan Air sued the three defendants in the U.S. District Court for the NMI for fraud, unjust enrichment, and violations of the Racketeer Influenced and Corrupt Organization Act.

The complaint, filed on July 12, 2012, alleged that the defendants fraudulently induced Saipan Air to transfer money and other assets to Swift Air.

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