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ATA assets headed toward auction

June 24, 2008
Bankrupt ATA Airlines aims to land court approval Friday to conduct a massive auction of assets next month in Indianapolis and Chicago.

"This will be one of the biggest auction events in Indy this year," states the Web site of Key Auctioneers. ATA wants the Avon firm to conduct the auction July 22 at ATA's once-thriving 7337 W. Washington St. headquarters.

ATA also proposes holding an auction July 24 in Bedford Park, Ill.

Indianapolis items to be auctioned include "800-plus" computers as well as vehicles, office furnishings, supplies, and telephone and computer equipment.

Neither officials of Key Auctioneers nor ATA attorneys could be reached for comment this morning.

But don't look to take home a jet engine for the riding mower: Aircraft-related assets won't be part of the sale, according to ATA's filing with U.S. District Bankruptcy Court in Indianapolis.

Still, the ATA auction is likely to draw local interest if only for its sentimental value. The former American Trans Air was founded in the early 1970s as a charter carrier by Latvian immigrant George Mikelsons.

Later came scheduled service, and ATA grew to become the nation's 10th-largest passenger carrier by the time of its first bankruptcy filing, in 2004. At one time ATA employed more than 6,000 people, including 2,300 in Indianapolis.

Mike Heimel, principal of Beech Grove-based Mike Heimel Auction Service, remembers a fair amount of interest in surplus items he previously auctioned from the airline's maintenance hangar. "We had a lot of people who worked there for a number of years."

ATA's disappearance is sad for some people, but the upside is the auctions should provide opportunities for other businesses to pick up items on the cheap and save some money. During a recent auction Heimel conducted for a local school district, a number of day care centers snapped up equipment on the cheap.

He said auctions also are becoming popular with savvy Ebay.com sellers, who buy items on the cheap at auction and turn around and sell them for a profit on the Internet site.

Whatever ATA ultimately gleans from auction, it wouldn't be enough to help the carrier make another go of the airline business. It was doomed by stiff competition, high fuel prices and the loss of its lifeblood military charter business.

Last April, ATA filed for bankruptcy a second time after Memphis-based FedEx booted ATA from its team that flies charters for the U.S. military. Hours later, ATA ceased all service and announced plans to liquidate. It recently sued FedEx over the lost business.

Approval to conduct the auctions is on the agenda of a June 27 bankruptcy court hearing in New Albany. Banking on a big auction turnout is JPMorgan Chase, which holds rights to ATA property as guarantor of $365 million in debt ATA incurred previously, in part to acquire Atlanta-based charter airline World Airways. The headquarters of the combined airline company, Global Aero Logistics, was moved to Atlanta.

Key Auctioneers plans to post a list of ATA items for sale within the next week or two.

Court records show the liquidating ATA already has unloaded a number of assets, including ground service equipment such as generators and stairs trucks, for $232,200.

Global Aero Logistics, meanwhile, is buying ATA catering equipment for an undisclosed price. A manufacturing firm is buying door training equipment for Boeing 737s and 757s, for $30,750.

The Indianapolis Airport Police Department is buying for $1,500 almost 900 of ATA's Taser cartridges, previously intended for unruly passengers, valued at $26,340.

A number of ATA employees working to wind down the company already have dibs on computers and monitors, ranging from $40 to $250 a piece. In court, ATA said there is a limited market for rapidly depreciating used computer equipment, citing quotes from three companies that buy and sell used computers.

"The employees will continue to use the miscellaneous assets until they are no longer employed by the debtor, and will take the equipment they are purchasing when they leave," ATA said in a court document.

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