Published:
Watkins Files Counter-Claim Against Detroit Pension Funds
BIRMINGHAM, Ala., June 24 /PRNewswire/ --Detroit law firm Butzel Long,
P.C. filed a counter-claim today inDetroit federal court on behalf ofAlabama
businessman Donald V. Watkins against twoDetroit pension funds (case no.:
2:08-cv-12582, USDC,E.D. of MI). The counter claim was filed a week after the
pensions funds sued Watkins for an alleged breach of contract involving a $30
million investment loan for the acquisition of TradeWinds Airlines, Inc., a
North Carolina-based cargo aviation company. The pension funds claim that
TradeWinds is in default on the loan and that Watkins Aviation, his
acquisition company, failed to make a required $5 million capital
contribution.
Watkins denied that the TradeWinds loan is in default on interest payments
or any other matter. He also contends that Watkins Aviation's $5 million
capital contribution of cash and stock was permitted under the investment loan
agreement and applicable law, was timely reported to the pension funds, and
was approved by their financial advisor.
Watkins' counter-claim seeks monetary damages for the pension funds'
breach of the credit agreement to TradeWinds, and a dismissal of their lawsuit
against him. He claims that the pension funds breached their contractual
obligations to TradeWinds by wrongfully declaring a "default" under the credit
agreement, wrongfully accelerating the entire debt of TradeWinds to the
pension funds, wrongfully causing widespread negative publicity regarding the
business operations of TradeWinds, and wrongfully precluding Watkins Aviation,
the majority shareholder in TradeWinds, from exercising its rights as the
majority shareholder.
Contrary to public statements made by pension fund board members, the
Detroit retirement systems have not "lost" their $30 million investment. In
fact, TradeWinds continues to operate its fleet of jumbo jets on a daily basis
for its core customers. Rising fuel prices, capital expenditures and other
economic factors facing the aviation industry have caused TradeWinds to adjust
its business operations by downsizing its workforce and streamlining its
flight operations.
Watkins also filed a third-party claim against Adrian Anderson and North
Point Advisors, LLC, the financial advisors for the pension funds on the
TradeWinds transaction. Watkins identifies Anderson, CEO of North Point
Advisors, as the financial advisor who received TradeWinds report of the $5
million capital contribution, approved it and notified TradeWinds that he
would convey his approval to the pension funds. Anderson's approval of the $5
million capital contribution was repudiated by the pension funds earlier this
month.
The pension funds rejected Watkins' efforts last week to resolve the
controversy out of court. "We always try to seek business solutions to
business disputes," said Watkins, who is also a nationally-known trial lawyer.
"It's unfortunate that the pension funds rushed to court without giving this
process a chance to succeed. However, we feel very comfortable that the
evidence and law in this case will support our legal positions."
SOURCE Butzel Long, P.C.
Copyright © 2008, PRNewswire
Copyright © 2008, NewsBlaze,
Daily NewsTags: ,FIN,MFD,LAW,AL-WatkinsCountrClaim
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