ADI Accused of Defaulting on $400,000 Loan
YOUNGSTOWN, Ohio – An objection to Aerodynamics Inc.’s application for a certificate that would permit the carrier to provide flights between Chicago O’Hare International Airport and Youngstown-Warren Regional Airport claims the airline is in default on a $400,000 note.
On Nov. 30, U.S. Department of Transportation tentatively recommended issuance of a certificate of public service to permit ADI to offer the expanded service.
According to the objection and accompanying exhibits filed Monday by James Paquette of Warrenton, Va. , and Via Airlines Inc., ADI Acquisition Co. LLC owes Paquette $406,053.53, and has failed to make a single payment under the terms of the promissory note dated July 14.
ADI Acquisition was formed by businessman John Beardsley and his wife to purchase ADI’s assets from Scott Beale earlier this year. ADI is incorporated in Michigan with a corporate office in Beachwood and an operations office in Kennesaw, Ga. The company applied last year to provide service between Chicago and the Mahoning Valley.
ADI’s former owner, Scott Beale, was accused of defrauding Paquette, the president of Test Flight Aviation Inc. of Chantilly, Va. in April 2012, according to media reports.
Monday’s filing included copies of the promissory note and guaranty, both dated July 14 and signed by Beardsley, and an affidavit dated Dec. 3 signed by Paquette.
“The immediate default of the minimal amount due ($8,765.61) raises a major red flag as to ADI’s fitness and casts doubt as to ADI and Mr. Beardsley’s actual motives in acquiring ADI upon issuance of a note, which they immediately defaulted on,” the filing states. “ADI’s failure to report its true financial condition segues to the question of its compliance disposition.”
The filing also claims that, as a result of the loan default, the U.S. Department of Transportation’s estimate of $1.75 million necessary to meet the financial fitness test is really in excess of $2.15 million, a shortfall of more than 20% from what ADI reported to the department.
The $400,000 note called for monthly payments of $8,765.61, including principal and interest of 2.5% annually.
The objection states that Beardsley, despite having tendered the promissory note to Paquette as part of the ADI purchase closing in July, “immediately faulted” on the promissory note, failing to pay the initial payment of $8,765.61, which was due Aug. 15.
Beardsley also failed to make the August, September and October payments.
“Based on ADI and its principals’ history … coupled with its failures to comply with a minimal payment ($8,765.61) immediately upon the provision of a promissory note, it is highly questionable whether ADI meets the minimum standards that Congress and the DOT mandate from otherwise ‘fit’ participants,” the filing states.
Copyright 2024 The Business Journal, Youngstown, Ohio.
