Who Does Who Represent In Lease/Bond Default?

The demise of Kitty Hawk cargo seems to be only weeks or months away. The air cargo company appears not to be current on the monthly lease payments of over $185,000 to the Fort Wayne International Airport. Kitty Hawk is in the process of trying to figure out if they can continue to operate, sale the business as an "on going" business, sale parts of the operation, or auction off what assets are left.

Kitty Hawk board member, Joseph Ruffolo was appointed several months ago to figure out what was in the best interests of the stockholders. The stock in Kitty Hawk is no longer traded and has a value of nearly zero. Kitty Hawk, is in such financial distress that the recent quarterly Securities Exchange Commission required filing was not made.

Fort Wayne and Allen County property owners will then be paying off over $20 million on the remaining bond debt. The bond payments will come from increased property tax rates.

Kitty Hawk came out of reorganization bankruptcy a few years ago and looked like the business would flourish. Between market changes, increased costs, and some poor business decisions the company is now a pile of debt. After the bankruptcy the Fort Wayne Allen County Airport Authority appears to have signed some type of lease modification agreement. Nearly $2.1 million in lease payments where deferred for 18 months.

Here is a thought process of why this entire Kitty Hawk - Fort Wayne International Airport relationship is concerning:

1- Joseph Ruffolo has a large stock investment in Kitty Hawk that could result in millions of dollars in financial loss if the company was to fail.

2- Joseph Ruffolo is a board member of Kitty Hawk.

3- Joseph Ruffolo is required to look out for the best interest of all stockholders.

4- Joseph Ruffolo, while serving a board member of Kitty Hawk would have to consider to modify the lease, reduce lease payments, or break the lease.

5- Jerome "Jerry" Henry, Jr. was appointed by Mayor Richard this year to serve as a board member of the Fort Wayne Allen County Airport Authority.

6- Jerome Henry, Jr., as a board member to the authority is responsible for looking out for the best interest of Allen County tax payers.

7- Michael S. Gouloff was appointed by Mayor Richard to serve on the board of the Fort Wayne Allen County Airport Authority.

8- Michael Gouloff, as a board member to the authority is responsible for looking out for the interest of the taxpayers in Allen County.

9- Ruffolo, Henry Jr., and Gouloff are all board members of Tower Bank.

10- These three may have additional business relationships besides Tower Bank.

11- Does Tower Bank have any business relationship with any government unit within Allen County?

12- Does Tower Bank have any business relationship directly, or indirectly with Kitty Hawk that affect the financial condition of Tower Bank?

13- Kitty Hawk could become an adversary with the airport authority in regards to Kitty Hawk's lease agreement

14- By Ruffolo's position, he could become an adversary to Henry Jr. and Gouloff regarding the Kitty Hawk lease.

15- Mayor Richard and the Allen County Commissioners should make public the contents and particulars surrounding the deferral of lease payments.

16- Mayor Richard and the Allen County Commissioners should make public as to if any government body within Allen County has a financial business relationship to Tower Bank.

17- Mayor Richard should seek from Henry and Gouloff that they have no other business interest with Ruffolo.

18- Mayor Richard should demand that both Henry and Gouloff complete the proper state form regarding conflicts of interest.

If Mayor Richard and the Allen County Commissioners fail to address this issue it will just add more fuel to the fire, of local government having wide spread conflicts of interest. This issue can be cleared up in short period if our community elected leadership wish to see to it.