Parties in Saipan Air lawsuit told to send reps with settlement authority

The federal court has ordered the parties in Saipan Air Inc.’s $50-million racketeering lawsuit against three executives of Swift Air LLC to attend a settlement conference, each with an authorized representative possessing settlement authority and counsel.

U.S. District Court for the NMI Magistrate Judge Heather L. Kennedy will preside over the settlement conference on Nov. 5, 2014, at 8:30am.

In an order on Wednesday, Kennedy said by noon on Nov. 3, each party shall exchange settlement statements and submit these statements, along with any more information that may assist her during settlement talks, by emailing them to her.

“These statements shall not become part of the case file and shall only be used for conducting settlement discussions in this matter. Any additional information submitted to the judge only will not be shared with the other party without consent,” Kennedy said.

The statements should include a brief outline of the facts of the case; undisputed issues and major issues in dispute; remedy sought such as damages, previous demands and counter offer(s); and any other information that may encourage settlement.

According to Saipan Air’s complaint, filed July 12, 2012, Donald A. Stukes, Jeffrey Conry, and Boris Van Lier fraudulently induced Saipan Air to transfer money and other assets to Swift Air.

According to court records, defendants were employees, officers, or advisers of Swift Air, an Arizona corporation. Conry was chief executive officer, Van Lier was director of operations, and Stukes was chief restructuring officer and also an employee of ASI Advisors LLC.

In April 2012, Saipan Air and Swift Air entered into an agreement for Swift Air to provide Saipan Air with aircraft, crew, maintenance, and insurance.

Over the next two months, Saipan Air wired a total of $1.267 million to Swift Air and provided a $524,000 letter of credit to secure delivery of the aircraft by July 1, 2012.

On June 21, 2012, Van Lier, acting on behalf of Swift Air, sent a letter to Saipan Air terminating the agreement. Less than a week later, on June 27, Swift Air filed for bankruptcy in the District of Arizona under chapter II of the Bankruptcy Code.

In response, Saipan Air took action on two fronts. In Arizona, it participated actively in the bankruptcy case. On Saipan, it filed a lawsuit against Stukes, Conry, and Van Lier.

Saipan Air’s chief operating officer Adam Ferguson alleged that a series of broken promises, misrepresentation, and outright lies by Conry, Van Lier, and other agents of Swift Air induced Saipan Air to enter into the agreement.

U.S. District Court for the NMI Chief Judge Ramona V. Manglona had denied defendants’ motion to stop Saipan Air Inc. from pursuing its lawsuit against them.

The defendants asserted that Saipan Air Inc. is enjoined from continuing its lawsuit against them due to the confirmed Chapter 11 reorganization plan of Swift Air Inc.

Manglona, however, ruled that the language of 9.7 section of the reorganization plan is far short of clear enough to alert Saipan Air that by assenting to such a plan it was agreeing to abandon its lawsuit.