Former Employees Of Pace Airlines To Receive A Portion Of Their Back Wages


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Former Employees Of Pace Airlines To Receive A Portion Of Their Back Wages

By Mike Mitchell

February 3, 2012 - In September 2009, Pace Airlines filed for Chapter 7 under the U.S. Bankruptcy Code, the process of liquidation. At that time, a number of employees had worked for the company up to six weeks without getting paid and a total of 423 employees were not paid for the time they worked. 

A number of employees reported that continued to work for the company even through they were not getting paid out of fear the company would not approve their unemployment benefits if they quit. 

In September 2009, Pace Airlines CEO, William C. Rodgers was arrested at Piedmont Triad International Airport on charges of knowingly canceling health insurance on employees.

North Carolina Department of Insurance investigators said Rodgers knowingly canceled his employee group health insurance without providing the required 45 day notice to his employees. Rodgers was charged with one count of willful failure to pay group health insurance premiums. 

The Department of Labor began an investigation on wage and employee complaints and in August 2010, the North Carolina Department of Labor filed a claim on behalf of the employees for $1.5 million in back wages. 

In August 2009, the owner of the company took out a liability policy for himself and its officers for $5 million. When the company filed for bankruptcy they were entitled to this money. However, because this was in bankruptcy court the court had the final say over the money. 

This week, through mediation, the National Union Fire Insurance Co. of Pittsburgh, bankruptcy trustee, Edwin Allman and the former owner of Pace Airlines, William Rodgers agreed to pay $1 million out of the $5 million liability policy in a settlement to the employees back pay, although the liability policy excludes coverage for claims as the result of unpaid wages. The agreement requires National Union Fire Insurance Co. to cut a check for $1 million by April 1 or within 30 days of approval by the bankruptcy court. 

This is somewhat good news for the former Pace Airlines who did not get paid in there last weeks with the company. Not all of this settlement money will go to the employees a large amount will cover attorney fees and expenses. This matter is expected to be heard on February 29, in the bankruptcy court in Winston-Salem. Rodgers is scheduled to appear in Superior Court on March 12 for canceling his employee?s health insurance. Rodgers remains out on $50,000 bond.  
From Pace Airlines to Hooters Air then back to Pace Airlines. In late December of 2002, the owner of Hooters, Robert H. Brooks, purchased Pace Airlines. The company began Hooters Air. Hooters Air did poorly and was unable to attract a customer base and in 2006, the company began flying as Pace Airlines. In September 2009, Rodgers bought the company incurring initial dept of $15 million and within four months the company filed for bankruptcy.

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