A Flair for Trouble

Everything was running smoothly, I was told. The lawyers were typing up all of the felony charges they were prepared to bring at this time, with the option of course to add more as things progressed later. It was decided that the US Marshall's would get the credit for the arrests (it sounded better on TV I think) that were scheduled to take place this coming Friday morning, but there was one weird change in all of the plans.

Steve Kreifelt had apparently ran his mouth just a little too much while in a local pub early in the week, and the word got out to our suspects that they were under federal investigation. Robert and Natalie, not being the brightest felons in the world, panicked and did something stupid. They talked Jasper into tampering with the brakes on Steve's big Lincoln SUV that Wednesday night, and expected the steep winding mountain roads to remove their 'persecutor' and buy them some time. As Steve joked later in the hospital while his leg was being put in a cast, "As a teenager my first car was a Ford Pinto that barely had any brakes at all, and I drove all over Mt. Katahdin in Maine that summer never knowing if I'd have any brakes or not." The experience saved his life and he ended up near the bottom of a hill near Berlin with only a bent-up front end and a slight leg fracture.

Robert and Natalie, realized that they had not thought out their clever plan all the way through properly, panicked some more and set fire to the executive offices Thursday night and beat a hasty getaway. By the time they reached Dallas-Fort Worth they were on the FBI's "Ten Most Wanted List". Since they had stupidly used their real names when making their plane reservations, an Air Marshall put a quick end to their getaway, adding arson and interstate flight to avoid arrest to their now quite long list of crimes.

All of the rest of the ducks fell into a row fast. Dimwit Jasper tried protecting his lover Natalie for a while, but was pathetically eager to recount all of the many crimes he had seen Robert commit. Robert in turn sacrificed Natalie as fast as he could in order to save his own skin. Each tried to make a deal with the State or the Feds, offering to be the "star witness" for the prosecution in return for a lighter sentence, but in their eagerness to be cooperative and hang each other they gave away too much, too fast.

In the end, all three pleaded guilty to a long list of State crimes and agreed to civil restitution for their long years of fraud. They accepted very long prison sentences only to find that all of the Federal charges were still pending and very much active. The Feds work very slowly, but when they screw you, you generally stay screwed. The appeals are still floating about, but my best guess is in twenty years when they get out of State jail, they will just move onwards to a Federal one to start serving the sentence for their other crimes.

We didn't recover quite all of the estimated embezzled and stolen $50 million. The Feds wanted to claim most of it as illegal out-of-country money transfers and ignored the fact that the money had been stolen from a rightful owner in the first place. We ended up settling for a deal that returned about half of it. It was better than nothing.

We did much better with the civil "corporate malfeasance" suit against Thomas Watson, Flair's hapless and incompetent CEO. Fearing the embarrassment that the disclosure of his financial mismanagement would bring to his hopes for any further corporate employment anywhere, he quickly agreed to a deal that liquidated most of his assets except for his primary residence. He lost the house next lost in the divorce suit with his wife as the details of his regular visits to certain hot-sheet motels somehow became also public knowledge. He didn't have a dime to his name when everyone was through with him.

The other most enjoyable piece of litigation was the civil suit the court appointed bankruptcy managers filed against the two aviation competitors of Flair's, who had actively contrived to illegally constrict competition and had colluded to assist in the sabotage of another corporation. Aviation Week and Space Technology magazine had a lot of fun with this story, and soon rumors were coming out about an apparent parallel investigation by the Fed's involving the rigging of government contracts. Faced with toxic bad publicity and rising shareholder revolts, both companies soon settled the civil cases with enormous settlement offers.

I didn't get to see much of Melissa at first, as I was constantly writing new "fact finding" reports and preparing case papers documenting all of the various flavors of 'fiduciary malfeasance' we had documented for each of the various parties involved. It seemed like there were at least a hundred different attorneys involved with some aspect or another of the Flair Bankruptcy.

As 98% of my time was being spent in Manchester or Concord, where most of the State and Federal activity was happening, and her homes were near both Berlin and Portsmouth, she just packed a few bags and showed up on my doorstep one night and ten minutes later I was emptying half of my walk in closet for her clothes. Twenty minutes later we were in bed together.

Over the next few weeks, I filled Melissa in on my budding plan for Flair's resurrection and she got the implications immediately. Cross country phone calls soon became a daily affair as we slowly worked out every little bit of our plan.

As the bankruptcy proceedings became more and more stalled, with all of the pending civil settlements and awaiting final criminal sentencing in the works, but not quite yet finalized; The Flair shareholders staged a mini-revolt at the annual meeting in September.

"Yes, the red ink was very red indeed" Melissa stated to the crowd, "but she had a plan that could restore Flair to profitability in 2-3 years." As Flair was now considered a nearly worthless 'Penny Stock' (as of the meeting, the share price was $ .62 cents and falling weekly), it was a tough proxy battle but we found a core groups of 17% of the outstanding investors willing to back our new proposed Board of Directors which included Melissa as President/CEO, and with Bill Tucker and "Ollie" Abercrombie as the other two board officers, giving her a working majority of 57%.

The surprises at the meeting were not over, with the prior approval of the Creditors Bankruptcy Committee and Judge Carlson, Melissa's next motion to the floor as the newly approved head of the Board of Directors, was to offer a "one-time today only" buyback offer of $1.00 per outstanding share. To raise the money, Melissa had sold her seaside home in Portsmouth and liquidated most of her personal savings.

There was considerable debate but a great many of the stockholders no longer had any faith in the company and were ready to accept a buyout today of about double what they thought they were likely to get in two or three weeks. By the end of this meeting, Melissa was once again the sole majority shareholder and controlled outright 61% of the shares.

Her offer was a bargain that soon others regretted not taking and several other minor shareholders ended up making a private sale of their stock later to Melissa in the final weeks before the last hearing of the bankruptcy court. At that the time, the stock price had dropped to as low as $ .12 cents/share and they sold back to her at $ .25. By the time we set foot in Judge Carlson's court for the last time, Melissa controlled about 78% of the stock outright and she started to feel safe for the future of the company.

To sum up the long proceedings of the final meeting of the Bankruptcy Court, the final financial obligations of Flair Aviation were calculated and contrasted with the sums earned by the sale of the companies substantial real estate near Berlin, the civil penalties collected, and the sale of every piece of company owned assets, manufacturing machinery, engine parts, computers, desks and chairs, etc.

Melissa, Bill, Ollie and I had pooled all our savings and bought at pennies on the dollar the more modern and useful fabrication and manufacturing machinery. Melissa had to take out a loan against her old family estate near Berlin to scrape up some of the last dollars needed for final last minute purchases of things as everything was now being pretty nearly given away at the very end, but we in the end had just enough for what we really wanted and needed.

In the end, it was announced that Flair Aviation was released from Chapter 7 bankruptcy with about $12 million left over in cash in the black, after all creditors had been paid. We had no factory, we had no aircraft, runways or hangers to park them on, but Melissa had her family company name back, totally free and clear, and we had a plan for the future.

Two days later, Flair Aviation sent out a press release to AW&ST and the other specialty papers of the aviation technology trade that "Tucker Aviation, a respected leader in the field of aircraft maintenance in Southeast Texas, was merging with Flair Aviation. The combined company would retain the name "Flair Aviation" and would soon restart aircraft manufacturing and repair at their new facilities in Lovett, Texas."

With our normal competitors under heavy Fed investigation that would last for years, we had an excellent chance at getting Flair's most modern design quickly updated and out of development and ready for a prototype to be manufactured in time for a Navy contract that was expected to be available for bidding in about nine months. We offered all of the long time employees the opportunity to rejoin the company's new operations down in Texas. There would be a moderate temporary pay cut (and no Union) and most likely no benefits at all for the first year or two, but we were surprised how many accepted this offer and joined us in our long caravan of trucks and moving vans heading South. The 'cost of living' was much cheaper in rural Texas, many said and they could sell their New England homes for a rich sum and buy bigger and far cheaper in Lovett and get ready for retirement at the same time.

We had core people for every department willing to stay with us that we could use to train the inexperienced but very enthusiastic to learn, Lovett young men and women that swarmed to apply for our new job openings. We even found a crusty mid-aged Vietnam vet who was a Wild Weasel pilot for three nightmarish years over there, and he agreed at once to become our resident Test Pilot, and even Bill had to admit that he was "nearly as good of a pilot as A.F.", that was rare praise indeed.

Our final day in New Hampshire, Melissa and I had Judge Carlson marry us, and I think it was the happiest job he had ever given me. He certainly gave the blushing bride many extra kisses for his congratulations for our future together down in Texas. Yes, Hartley Consultants has closed up shop in snowy, windy New England and has joined the snow birds heading south. My new job as CFO for Flair should keep me extremely busy for a good long while, but my boss, the President and CEO thinks I should have plenty of time to soon learn how to change diapers and prepare bottles for 3 a.m. feedings.

Rachel, Melissa and I cashed in our IOU's to the Governor, and while it took awhile to filter all of the way down the political chain of command, Rachel received the very minimum possible sentence of two years for her plea bargain for two counts of Involuntary Manslaughter, to be served concurrently at a very low security women's prison.

She's doing alright there and we try and come up and visit her every month. Melissa and Rachel may no longer be lovers, but they are once again the closest of friends. She'll probably just miss our first demonstration plane flight for the Navy this summer, but we're hoping she'll be released in time for the Corporate Aviation Trade Show in Vegas later in the fall.

We're nearly lost without our Senior Executive Secretary, but we're resolved that we won't let her do any more late night engine maintenance!