CPA: 30-day eviction notice to stand after bankruptcy dismissal

Posted on Feb 04 2014

The Commonwealth Ports Authority remains firm in its decision to evict Freedom Air from its premises once its ongoing bankruptcy case is resolved, according to CPA executive director MaryAnn Lizama after a meeting Friday with the board of directors.

Due to the airline company’s bankruptcy filing in September last year, the ports authority was barred from taking any action on the company’s debt of over $1.2 million.

“Because we issued an eviction notice and then they filed for bankruptcy, it prevented us from evicting them. If and when the court releases Freedom Air, then we will stand by the decision we made last year—the 30-day eviction,” said Lizama.

According to her, the U.S. Trustee earlier recommended to the court the dismissal of the bankruptcy case filed by the airline carrier.

“Once it is dismissed, the eviction notice will kick in,” Lizama said.

Citing Freedom Air’s financial losses, Lizama hinted that it may be difficult for the ports authority to collect the debts owed it.

The CPA board issued in August a 30-day eviction notice to Freedom Air due to its unpaid obligation of $1.23 million in three years. On the day it was supposed to be evicted on Sept. 19, the board made a split decision to provide the airline company a 90-day reprieve, giving it until Dec. 31, 2013, to settle its debts.

However, in an unexpected turn of events, Freedom Air filed a bankruptcy petition on Sept. 27, which prevented the ports authority from enforce its decision.

The company filed the Chapter 11 bankruptcy in Guam, which allows the carrier to reorganize while it continues operation. Freedom Air has 120 days to reorganize itself under Chapter 11.

Saipan Tribune learned that Freedom Air is behind in PFC payment for Saipan amounting to $273,500; Rota, $148,392; and for Tinian, $202,275.

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