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Freeborn & Peters LLP Bankruptcy Partner on NatTel's Bid for ATA's Chicago Express

24 Dec 2004

Firm Cries Foul in ATA Case by Ted Evanoff

by Ted Evanoff, The Indianapolis Star

East Coast investors say they plan to appeal court's rejection of $37,700 commuter line bid.

A Connecticut investment firm whose $37,700 bid for Chicago Express was spurned this week in ATA Airlines' bankruptcy auction intends to appeal the rejection.

NatTel LLC of Stamford, Conn., filed a notice of appeal Thursday in bankruptcy court in Indianapolis in an effort to win control of a commuter line whose 34 small airliners feed passengers to ATA's hub at Chicago Midway.

Lawyers doubt the new legal action would disrupt the $117 million bailout that bankrupt ATA arranged with Dallas-based Southwest Airlines.

But the legal dispute could take more than a month to resolve and sidetrack ATA executives preparing a reorganization plan due in bankruptcy court Feb. 25.

NatTel contends the offer for the 600-employee commuter line was improperly rejected.

"Either our bid should be approved or we're going to request an examiner investigate these final dealings," NatTel founder Jack E. Robinson told The Indianapolis Star.

"The company is not being managed well by ATA," Robinson said of Chicago Express, adding he would add flights and commuter aircraft.

NatTel's attorney, Aaron Hammer of the Chicago law firm Freeborn & Peters, said his client has lined up $80 million in potential bank loans to buy more planes and operate the commuter line.

Robinson, of Duxbury, Mass., is a former Eastern Airlines executive who in 2000, running on the Republican ticket, failed to unseat the long-entrenched U.S. Sen. Edward Kennedy.

During the race, campaign records showed Robinson earned more than $557,000 in fees in 1999 from his firm, Paradise Communications, a cell phone company in the Bahamas.

Robinson said he has sold Paradise and is investing the proceeds through NatTel.

The firm's $37,700 offer for Chicago Express is an amount equal to what NatTel estimated would be ATA legal fees to complete the sale of the commuter line, Robinson said. Because the commuter line is in bankruptcy, leases its planes, owns no major assets and is starved for profits by ATA, the business itself is not worth anything, Robinson said.

ATA officials and lawyers did not return phone calls Thursday from The Star seeking comment.

ATA Holdings and all its operations, including Chicago Express and ATA Airlines, filed for bankruptcy protection Oct. 26.

As part of ATA's reorganization, U.S. Bankruptcy Judge Basil Lorch III accepted Southwest's offer Tuesday and rejected NatTel's bid for Chicago Express.

NatTel submitted the offer Dec. 10 as part of a bankruptcy process that let other companies bid on part or all of ATA.

ATA attorney James Carr, of the Baker & Daniels law firm in Indianapolis, on Tuesday said NatTel was not deemed a qualified bidder in part because it did not appear to have the financial clout to pull off the deal.

Carr earlier told The Star that ATA had no interest in spinning off Chicago Express because it needed the passengers it brought to Midway.

Southwest's bid was for six ATA gates at Chicago Midway and did not concern the Chicago Express line.

The only other bidder, AirTran Airways of Orlando, offered $89.9 million for all 14 ATA gates at Midway and slots in New York and Washington airports.

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