Another one goes belly up. It's getting old.

ausrere

Pattern Altitude
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Feb 22, 2005
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Lisa
For the second time, I've had an FBO go belly up on me...taking the money I have on account with them (it's the fourth time I've had one go out of business, but only the second time they took my money with them). This is really getting old. They sucker you in to buying block time to save a little money, then close the doors and take your money with them. At least this time it's less than $400.00. Last time it was more. AND, at least they weren't successful in talking me into buying one the several thousand dollar "pay up front" packages they tried so hard to sucker me in to.

I got an email from Alliance Flight at AUS telling me they were closing the doors. They did leave a phone number to call if you had any "questions". I guess the questions about how to get your refund aren't important enough to return. No response to email either...not surprisingly. I'm giving up on block time. I'm about ready to give up all together until I hit the lotto and can afford my own %$#@ plane! :mad:
 
You could partner with someone on a 152 and only have spent about 10K
 
Dont give up, maybe you should just pay as you go or join a club or something.

KT
 
That really sucks.

Perhaps you could enlist the help of your District Attorney. If they've declared bankrupcy, I would think you could get on the list of debtors owed. Maybe small claims court.

Just some suggestions, I'm not an attorney and I *haven't* slept at a Holiday Inn Express. Good luck.
 
If it's bankruptcy you'll be an unsecured creditor. That's the bottom of the totem pole on getting paid. At least you got an email... when one FBO went under, they didn't bother to tell anyone. Just shut the doors. I found out through the grapevine and got my plane pulled out of the T-Hangar before anyone could change the locks. In the end, the T-Hangar situation worked out (albeit at a higher price), but a number of folks lost money like you did.

Can you join a club up there? Might be a much better way to go.
 
That's why pre-paying and IMHO even block-time is bad. The small savings do not outweigh the risk of losing it all.
 
wsuffa said:
If it's bankruptcy you'll be an unsecured creditor.

Are you sure, Bill? It seems to me that purchase of block time is the same as deposits and prepayments to a manufacturing company. As in net sales entered, etc.
 
My flight school went out of business when I was almost done with my instrument training. I had $$ on account. So did others. In my case, it wasn't a lot of money, though it would've covered a few more lessons, so it stung. Luckily, another school on the field heard about it and offered any of us who wanted to go over and join them [several other schools from which to choose] a chance to do so without the $100 "initiation" fee, first month's dues [$35] and we didn't have to re-check out in any of their planes if we had done so in the previous school. We did have to fly with one of their CFIs, routine, but my CFI hired on there and I stuck with him so it was a non-event. We checked out by my having another instrument lesson, so I got really lucky.

Good luck to you, this happens far too often. After my lucky break, I kept my account down to no more than a couple hundred bucks, just in case. Meant I was writing them checks fairly frequently, but I set up a separate checking account for myself into which I put dedicated flying funds and swore to myself I wouldn't "borrow" from it!!
 
The Old Man said:
Are you sure, Bill? It seems to me that purchase of block time is the same as deposits and prepayments to a manufacturing company. As in net sales entered, etc.

It's generally the case that this is unsecured debt, unless there was a contract specifying that you have a secured interest in the assets of the business. It is on the priority list, along with other unsecured creditors, when the case goes to trial. In other words, it's unsecured, but it does get some priority over certain other unsecured claims (but is lower than employee wages and compensation).

I'm not a lawyer, but I have worked in a business sense on some situations that involved bankruptcy.

Here's the instructions for the US BK Court claim form. Please note the wording of instruction 6): http://www.uscourts.gov/bkforms/official/b6e-inst.pdf

That is not a definitive answer, and you should seek legal council. Other disclaimers apply, blah, blah, blah.
 
We don't have block time, but we have $300 refundable "membership". But we also get credit accounts that are due monthly for up to $800. So, if they were to go out of business (which I DON'T see as a real possibility at this point), I'd be somewhere between out $300 or ahead $500. :)
 
wsuffa said:
I'm not a lawyer, but I have worked in a business sense on some situations that involved bankruptcy.

I'm not either, but have been on the inside (employee) of 2 bankruptcys and outside (independent contractor) of another.

In one of them, I was the business manager of an insurance school. We carried prepayments as a liability until the class was attended. this put the money in a different category on the balance sheet and the P&L. i.e. not income until the obligation incurred was satisfied.
 
The Old Man said:
I'm not either, but have been on the inside (employee) of 2 bankruptcys and outside (independent contractor) of another.

In one of them, I was the business manager of an insurance school. We carried prepayments as a liability until the class was attended. this put the money in a different category on the balance sheet and the P&L. i.e. not income until the obligation incurred was satisfied.

Was that under the new or the old bankruptcy code? It has changed in the last year or so....
 
wsuffa said:
Was that under the new or the old bankruptcy code? It has changed in the last year or so....

I have no idea, I was gone before the bankruptcy, but still owed some compensation. The placement of the receipts was according to GAAP on unearned income.
 
The whole thing stink Lisa, sorry it happend again.

Have you looked into a partnership and just buy an airplane? At the very least check for stable flying clubs
 
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