Ric
You forgot the BIGGEST ONE OF ALL!!
MASG MASG MASG MASG Message list | Reply to msg. | Post new msg. « Older | Newer »
By: airpie
28 Dec 2004, 06:36 PM EST
Msg. 10310 of 10312
Jump to msg. #
From the September 3, 2004 San Antonio Business Journal print edition:
Hot sparks are flying in Mooney litigation.
Reporter: Tamarind Phinisee
Contentious pleadings filed recently in U.S. Bankruptcy Court here in the case of a beleaguered aircraft manufacturer have now been laid on the steps of the U.S. Attorney's Office.
The case revolves around business transactions related to the bankruptcy of Kerrville-based Mooney Aircraft Corp, which filed for Chapter 11 protection in 2001.
Pleadings filed on July 28 by former Mooney Chairman Paul Dopp take issue with the handling of the Mooney bankruptcy case.
The pleadings allege that Advanced Aerodynamics & Structures Inc. (AASI), now known as Mooney Aerospace Group (MASG), engaged in criminal activity "prior to, during and following the sale" of Mooney's assets to AASI in the spring of 2002.
This activity, Dopp alleges in the court filing, "not only violated federal and state statutes but caused damages in excess of $20 million to the debtor's (Mooney's) estate and others."
A response filed with the court on Aug. 17 by J. Nelson Happy, Roy Norris (both of AASI) and LH Financial Services Corp. claims that Dopp's accusations are "slanderous" and "are little more than a repackaging of similar outlandish and unsupported allegations made and rejected in other federal district court litigation ... ."
The response also alleges that "Dopp is apparently angry over" the bankruptcy court's determination that "he was apparently not fit to operate the company in its bankruptcy case."
The pleadings ask for dismissal of Dopp's claims, reimbursement of all fees and costs incurred in having to respond, and injunctive relief preventing Dopp from making future filings.
In a ruling on Aug. 26, a U.S. Bankruptcy Court judge here determined that the matter should be referred to the U.S. Attorney's Office for potential investigation.
The basics
According to Dopp's filing, just days after Mooney filed a bankruptcy reorganization plan on Nov. 26, 2001, a delegation from AASI -- including Happy -- expressed interest in purchasing Mooney's assets in Kerrville.
In December of that year, Dopp's filing alleges, "a meeting was held at Miami's Airport between Dopp and others claiming to represent AASI, including Happy, Roy Norris, Sam Rothman, Shalom Babad and Joseph Sarachek."
In this meeting, the filing contends, "Sarachek, president of Balfour Advisors of NYC, represented that he had very unique and personal relationships with Congress Financial, (Mooney's) controlling and largest secured creditor."
Also at this meeting, according to Dopp's court pleadings, AASI agreed to jointly participate in the reorganization plan that Mooney had filed in November and "a binding agreement was executed between the parties" on Dec. 28.
However, the response filed by Happy and his co-defendants argues that AASI had only entered into a "non-binding letter" of agreement with AVAQ Group Inc., Mooney's sole shareholder at the time. Dopp also was chairman of AVAQ.
Opposing view
The court pleadings filed by Happy further argue that "Dopp had no control" over Mooney because the bankruptcy court "had previously entered an order on Aug. 21, 2001, divesting (Dopp) of any managerial power or control over Mooney."
As a result, the reorganization plan filed by Dopp was "struck on Feb. 11, 2002, by the bankruptcy court" and "no joint venture agreement between AASI and AVAQ or Mooney was ever prepared," court documents state.
At that point, according to Happy's pleadings, AASI began looking at alternative methods to acquire Mooney's assets and later purchased the note and lien rights of Congress Financial, becoming Mooney's primary secured creditor.
The deal outlining the proposed sale of Mooney's assets, the pleadings contend, was filed and made public "to all creditors and other parties of interest as required. ...
After approval of the sale order, the transaction was closed" and AASI "restarted airplane manufacturing operations." Happy's court pleadings claim that "there has been no fraud."
In addition, the pleadings allege that Dopp is seeking "some money payment after refusing all settlement offers in the District Court litigation and then losing completely."
The other side
Dopp's pleadings in the case contend that Happy and AASI have perpetrated a fraud upon Mooney and its investors.
By way of example, Dopp, in his court pleadings, claims that two days prior to the Dec. 28 agreement, Happy listed in an e-mail his primary source of capital as "Bawag Bank of Austria."
The bank, Dopp alleges in the court filings, whose full name is Bank fur Arbeit und Wirtschaft AG, had been "previously mentioned in" U.S. and international media articles "regarding certain questionable activities ... ."
Dopp alleges in his pleadings that among those listed as "investing in AASI/MASG" from 2001 to 2003 were "diverse offshore tax-haven entities."
Furthermore, he charges in his filing that AASI's SEC Form SB-2, filed Dec. 12, 2001, listed AASI's total current and long-term lease obligations at about $10 million.
However, in the spring of 2004, Dopp's filing alleges, "an arbitrator and California judge ruled" that AASI/MASG owed approximately $24 million on "its defaulted Long Beach Airport leased premises."
On Jan. 30, 2002, Dopp contends in the court filing, AASI acquired Congress Financial's $13 million loan to Mooney and from that point on exercised "substantial control over the sale of the debtor's assets, while unilaterally denying any agreements with AVAQ and Dopp under the reorganization plan."
A few months later, in March, Dopp claims in his pleadings that AASI "agreed to purchase the assets of (Mooney) and ... deliberately conveyed worthless shares and notes to the debtor's estate."
The filing alleges that in the summer of 2003, L. Peter Larson, former CEO and CFO of AASI/MASG, told Dopp that he had resigned from his post in November 2002 because "he was concerned by what he believed to be money laundering activities being conducted by AASI/MASG investors at AASI/MASG."
Dopp's filing further alleges that on Sept. 12, 2003, Norris told Dopp that during his tenure at AASI/MASG and before his departure in August 2002 as the company's CEO that "Happy was at all times acting solely on instructions and orders of Bawag Bank's affiliate, LH Financial Services."
On May 28, 2004, the filing claims, the Superior Court of Los Angeles County entered a judgment for more than $23 million against AASI/MASG, in favor of AASI/MASG's former landlord, AP Long Beach Airport LLC, because of the company's "deliberate failure ... to recognize and provide appropriate reserves and to file the mandatory SEC disclosure statements required by statute."
A month later, Dopp claims in his court filing, Happy announced that MASG had "sold all the shares of its subsidiary, Mooney Airplane Company" to a "Swiss entity, Allen Holding & Finance Ltd." on the same day that the California superior court's judgment was announced.
Dopp says this was a "mysterious, hurriedly contrived sale of MASG's recently acquired Mooney assets ... ."
Dopp argues in court filings that the sale of the assets "deserves a thorough and complete investigation by the appropriate USA and international regulatory and enforcement agencies."
Daryl Fields, spokesman for the U.S. Attorney's Office in San
UBBFriend: Email this page to someone!
Printer-friendly view of this topic
