Heli USA Airways Inc., one of the largest helicopter flightseeing companies in Las Vegas, filed for Chapter 11 bankruptcy protection late Monday in the midst of a payment dispute regarding the choppers.
The court papers included only the bare bones, initial three-page form, indicating that both assets and liabilities both ran less than $50,000, did not include any details such as the largest creditors. According to attorney Ambrish Sidhu, many of the pleadings typical of a bankruptcy will come later this week.
Sidhu said the company resorted to bankruptcy shortly ahead of a Tuesday hearing in Clark County District Court to allow a manufacturer to seize three helicopters after Heli USA quite making its lease payments.
“This will allow us to get all our ducks in a row and get all the issues resolved in one location,” Sidhu said.
A bankruptcy filing halts all other legal actions while the company gets breathing room to try to stabilize operations and craft a reorganization plan.
According to statistics by the Clark County Department of Aviation, the 18-year-old Heli USA was the second-largest of the three helicopter companies to operate out of the west side of McCarran International Airport. It has carried 38,000 passengers through the first nine months of this year, a 23 percent drop from 2012 and well behind leader Maverick Helicopters at 202,000.
AgustaWestland Philadelphia Corp., which leased the three Agusta helicopters to Heli USA, said that the tour company defaulted a year ago on the $32,000-a-month payments. Further, a company representative said Heli USA was not maintaining the choppers correctly, raising the “danger that the aircraft will suffer serious harm.”
On this basis, and the chance that the helicopters might leave Nevada, Clark County District Judge Susan Scann signed a temporary restraining order on Oct. 14 that grounded them.
However, attorneys for Heli USA denied any maintenance problems.
Instead, they noted in court papers, that the company quit paying the five-year leases as part of a broader dispute over the helicopters themselves. In particular, the helicopters were not equipped with special windows and in-flight entertainment systems as ordered, triggering a protracted dispute over the warranties.
Heli USA sold some of its other aircraft to buy the Agustas but still owns two others that have allowed it to continue carrying tourists.
On top of that, Heli USA owner and CEO Nigel Turner said that the U.S. government had improperly closed a bypass road that feeds visitors to the Grand Canyon Ranch and the Grand Canyon Frontier, an attraction that opened earlier this year in anticipation of the peak summer season. This had significantly crimped revenues and was only recently resolved by a federal court action in Phoenix to reopen the road.
“I do not do this (bankruptcy) lightly,” Turner said. “This is a sensible step. It has been a very hard year.”
Contact reporter Tim O’Reiley at email@example.com or at 702-387-5290.