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NO PARACHUTES FOR SOUTHEAST

The defunct Largo airline's remaining assets will be sold at an auction this week to help pay off $15-million in creditor claims.

The final chapter in the sorry tale of Largo-based Southeast Airlines begins this week in federal bankruptcy court.

The defunct airline's only remaining assets - two 25-year-old jets and a spare engine - are scheduled to be sold in a sealed-bid auction Thursday.

Proceeds won't come close to paying off creditor claims that could easily exceed $15-million. A Latin American company offered $580,000 for the jets, parked outdoors more than 2-1/2 years at an airport near Orlando.

One open question: Will any money go to some 350 employees whose final paychecks bounced when Southeast suddenly shut down just after Thanksgiving 2004?

"The big companies can write it off," said Denise Tuafono, a former Southeast Airlines station manager at St. Petersburg-Clearwater International Airport. "It's the people who had to put food in their kids' mouths before Christmas who deserve it."

The trustee for Southeast is asking U.S. Bankruptcy Judge Catherine Peek McEwen to void at least part of a $652,000 lien on the aircraft by Orlando-Sanford International Airport.

That might make money available for former employees, depending on how much the planes fetch and how a final settlement among creditors works out.

"We don't know if it will ultimately be something or virtually nothing," said Robert Wahl, an attorney for trustee Angela Esposito.

Some creditors with liens and court judgments against Southeast will try to stop the auction Thursday to keep proceeds from going to unsecured creditors like the employees or fees to Esposito.

A public charter carrier, Southeast operated a fleet of eight aircraft. It flew from St. Petersburg-Clearwater International, Orlando-Sanford and Fort Lauderdale to small airports in the Northeast and Midwest.

Squeezed by rising fuel costs and competition from bigger discount carriers, Southeast suddenly shut down the evening of Nov. 30, 2004.

Hundreds of passengers were stranded and forced to find flights home on other airlines. Employees like Brian Baker received paychecks for their last two weeks.

But nearly all were told the next day that the airline's account at United Bank of St. Petersburg was frozen. A delivery driver, Baker called the bank daily for a couple weeks trying to cash the check for $1,212.76.

"Now, it's just a souvenir,'' says Baker. "It was the second biggest paycheck I'd ... got.''

Some passengers waited more than a year to receive refunds, nearly all through refunds from their credit card companies.

The company didn't have enough money to file for bankruptcy, said Terence Haglund, the airline's attorney who now practices in Williamsburg, Va.

Creditors sued in various Florida courts before agreeing to file in November for an involuntary bankruptcy liquidation against owner Thomas Kolfenbach and Southeast.

Steve Huettel can be reached at huettel@sptimes.com or (813) 226-3384.

$15M

amount of claims by creditors

2

Southeast jets left to be auctioned

$580,000

Latin American company's bid for the planes

350

Employees whose last paychecks bounced

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