Published:
Watkins Fights for Control of Cargo Airline
BIRMINGHAM, Ala., June 19 /PRNewswire/ --Birmingham businessman Donald V.
Watkins is engaged in a bitter fight for control of TradeWinds Airlines, Inc.,
aNorth Carolina-based cargo aviation company he acquired earlier this year.
Watkins, whose aviation acquisition company owns 77 percent of TradeWinds, is
the company's chairman.
The Retirement Systems of theCity of Detroit and Watkins are the
principal investors in the company.
TradeWinds operates a fleet of A300-B4F freighter aircraft for domestic
and foreign customers. The company also conducts international and domestic
on-demand cargo charter operations.
The fight for control of TradeWinds became public earlier this month in
Detroit when Watkins appeared before the City's two pension boards to discuss
the company's downsized operations and capital needs in the face of rising
fuel prices and increasing capital and maintenance expenses. The two boards
openly questioned Watkins' financial commitment to the company.
Watkins pointed out that he had made and reported the required capital
contribution to TradeWinds, and that it was approved by the pension boards'
designated financial advisor. Watkins further noted that he had met or
exceeded all financial obligations imposed upon him by the pension boards'
investment agreement.
The pension boards later claimed that TradeWinds had failed to make a
required interest payment on its loan. In fact, the boards had failed to
notify TradeWinds of the floating rate interest payment amount as they were
required to do until well after the financial dispute erupted during the June
4 and 5 pension board meetings. Even then, the boards seized control of
Watkins' stock in TradeWinds, using a stock pledge agreement, before the
company's first interest payment was due.
Watkins has proposed to buyout the pension boards' loan note and equity
position in TradeWinds, but the boards have not responded to his buyout offer.
"The matter may have to be settled through other means," said Watkins.
"We are in a bad business marriage with an incompatible business partner,"
said Watkins. "We are working hard to get the pension boards out of
TradeWinds."
Watkins firmly believes that the negative political environment
surrounding embattledDetroit Mayor Kwame Kilpatrick has spilled over to his
TradeWinds transaction with the pension boards. "It is virtually impossible to
do business with them in such a politically-charged and hostile environment,"
said Watkins.
SOURCE Watkins Aviation, LLC
Copyright © 2008, PRNewswire
Copyright © 2008, NewsBlaze,
Daily NewsTags: ,AIR,LAW,AL-Watkins-TradeWinds
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