‘Freedom Air assets not enough to cover debt’

The Commonwealth Development Authority doubts that liquidating the assets of the defunct Freedom Air would be enough to cover its outstanding balance to affected government agencies in the CNMI and Guam.

Freedom Air’s aircraft assets on Saipan were already auctioned off in December 2015, but only brought in about $10,000, much to the dismay of CDA and the Commonwealth Ports Authority.

When asked for comments about the Guam International Airport Authority’s plan to sell off Freedom Air assets on its property, CPA executive director Chris Tenorio and CPA board member and airport facilities committee chair Barrie Toves told Saipan Tribune that they need to consult with their legal counsel first before releasing a statement.

CDA, on the other hand, was disheartened.

“We got rid of all the [Freedom Air] assets, and it was not really encouraging on our side,” said CDA loan manager Oscar Camacho.

“We did our best to try and auction all the aircrafts that were here in the Saipan airport but the auction didn’t give us that much. [Freedom Air’s] stuff only sold for about $10,000,” he told Saipan Tribune.

Camacho said some of the aircrafts lacked engines, while one of the aircraft at hand was only a shell.

“The bulk of the value is the ones in Guam,” said Camacho.

CDA previously stated in Saipan Tribune archives that an estimated $1.3 million could be obtained from auctioning Freedom Air assets at the Guam airport.

The Guam International Airport Authority obtained lien over the assets of Freedom Air after finding out that CDA failed to perfect its security interest in Freedom Air assets due to CDA’s failure to file a financing statement with the Guam Department of Revenue and Taxation.

Despite failing to obtain lien over Freedom Air assets, Camacho said the person of guarantee, former Freedom Air owner Joaquin Flores, is the signatory to the CDA loan. “The loan is still a debt. …We have real estate assets as collateral [on Saipan], Rota, and Guam, “ said Camacho.

“I am doubtful that it [auction] would get to cover all the debt, but we are hoping that GIAA garners a good auction this Feb. 2,” he added.

“CDA entered into an agreement [with GIAA] that they proceed with the auction. It has been a long time since making that decision and it seems just about time that they push through with it. I guess there were internal things that [GIAA] had to overcome before arriving at this point.”

Freedom Air owes CPA $1.2 million and CDA exactly $906,225.17, which is a $2.2 million debt.

GIAA has announced this week in a notice signed by GIAA executive manager Charles H. Ada II that Freedom Air assets are to up for auction this Feb. 2, 2017 at Building No. 17-80 Admiral Sherman Blvd., Tiyan Guam.

For more information, contact (671) 646-0325/6 or vanessap@guamairportnet or joej@guamairport.net.