IBJNews

Defunct ATA Airlines awarded $66M in FedEx lawsuit

Back to TopCommentsE-mailPrintBookmark and Share

An Indianapolis jury has returned a $65.9 million verdict against Memphis-based FedEx in a breach-of-contract lawsuit brought in 2008 by now-defunct ATA Airlines.

The former Indianapolis carrier alleged FedEx broke a long-term contract with ATA to fly troops on behalf of the federal government. ATA ceased operations in April 2008, shortly after it was informed by FedEx that it would no longer be part of FedEx’s military contracting team.

Last week, the U.S. District Court jury said ATA is entitled to $21.9 million in lost profits for 2008 and $43.9 million in lost profits for 2009.

ATA originally had sought $94 million. Last April, however, FedEx won a partial summary judgment that tossed out some of ATA’s claims, leaving just the breach-of-contract charge.  In a recent regulatory filing prior to the Oct. 19 verdict, FedEx declared: “We still do not believe that any material loss is probable.”

“We respectfully disagree with the jury’s findings and are evaluating our options,” FedEx spokeswoman Sandra Munoz told IBJ on Monday.  It is widely expected that the company will appeal the verdict, which was reached after three hours of deliberations.

Any money ATA ultimately recovers will be distributed to creditors, including pilots, said Ken Broughton, an attorney for Texas-based Haynes and Boone LLP, which represented the airline.

In a statement, Broughton said that “unfortunately, any judgment ATA recovers from FedEx won’t revive" ATA.

According to bankruptcy records, ATA had 4,970 unsecured claims totaling $571.6 million as of June 30. The largest unsecured creditor listed is Wells Fargo Northwest, seeking $301 million.

ATA, founded in the 1970s by Latvian immigrant George Mikelsons, grew to be the nation’s 10th-largest scheduled passenger airline. An expensive fleet upgrade begun prior to the Sept. 11, 2001, terrorist attacks came back to haunt ATA as the industry slowed in the years to follow.

ATA filed its first Chapter 11 reorganization in October 2004. At first, Southwest Airlines bought a portion of ATA stock, along with New York vulture firm MatlinPatterson.  ATA’s headquarters were moved to suburban Atlanta, where the carrier became part of a larger organization based there—Global Aviation Holdings, operator of charter carriers World Airways and North American Airlines.

Dallas-based Southwest walked away with ATA’s valuable gate slots, including those in New York City.

ADVERTISEMENT

  • ATA & MatlinPatterson
    MatlinPatterson are INDEED a "VULTURE FIRM".

    They Screwed Varig in Brazil, they screwed ATA in the U.S., and they are currently pulling the purse-strings at Global Aviation Holdings (parent of World Airways & North American Airlines) in Peachtree City, Georgia.

    These people are nothing but VULTURES and don't give a damn about ANYTHING but profit.

    We all hope to God that the World Airways filing with the SEC to go public (again) takes-off, before World is stripped of its' assets and its' rich history.......

    SHAME ON YOU MatlinPatterson!!!!! You people are nothing but financial RAPISTS!
  • "Vulture" firms
    Let me learn you, Freudian Slip and Typo?Really? -- "vulture firm" is a real name on Wall Street for investment firms that buy assets of distressed companies, hoping to fixem' up and sell them later for a profit. Go back to reading the Star and have another fistful of Slim Jims.
  • Freudian Slip?
    That is the first time I have seen a Freudian slip in writing. How appropriate.
  • Typo? Really?
    "...New York vulture firm MatlinPatterson."

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. why oh why does this state continue to elect these people....do you wonder how much was graft out of the 3.8 billion?

  2. i too think this is a great idea. I think the vision and need is there as well. But also agree with Wendy that there may be better location in our city to fulfill this vision and help grow the sports of hockey and figure skating in Indy. Also to help further develop other parts of the city that seem often forgotten. Any of the other 6 townships out side of the three northernmost could benefit greatly from a facility and a vision like this. For a vision that sounds philanthropic, the location is appears more about the money. Would really like to see it elsewhere, but still wish the development the best of luck, as we can always use more ice in the city. As for the Ice growth when they return, if schedules can be coordinated with the Fuel, what could be better than to have high level hockey available to go see every weekend of the season? Good luck with the development and the return of the Ice.

  3. How many parking spaces do they have at Ironworks? Will residents have reserved spaces or will they have to troll for a space among the people that are there at Ruth Chris & Sangiovese?

  4. You do not get speeding ticket first time you speed and this is not first time Mr.Page has speed. One act should not define a man and this one act won't. He got off with a slap on the wrist. I agree with judge no person was injured by his actions. The state was robbed of money by paying too much rent for a building and that money could have been used for social services. The Page family maybe "generous" with their money but for most part all of it is dirty money that he obtained for sources that are not on the upright. Page is the kind of lawyer that gives lawyers a bad name. He paid off this judge like he has many other tine and walked away. Does he still have his license. I believe so. Hire him to get you confiscated drug money back. He will. It will cost you.

  5. I remain amazed at the level of expertise of the average Internet Television Executive. Obviously they have all the answers and know the business inside and out.

ADVERTISEMENT