Update: Alaska AG says North Slope Borough can’t ‘commandeer’ Ravn’s North Slope assets

In Anchorage, passengers board a RavnAir Group flight bound for Unalaska.  (Photo by Laura Kraegel/KUCB)

Updated story — April 8, 2020 — Nat Herz, Alaska Public Media

Alaska Attorney General Kevin Clarkson says there’s no legal authority behind the North Slope Borough’s emergency order attempting to seize the property of a bankrupt airline within the borough’s boundaries.

Borough Mayor Harry Brower issued the order Sunday, the same day that RavnAir Group filed for bankruptcy in Delaware court.

Ravn was the only passenger air service to some of the borough’s isolated villages.

Last week, the company announced the termination of nearly all of its flights to the more than 100 communities it served, citing a 90 percent reduction in ticket sales due to the coronavirus pandemic. On Sunday, it announced it was shutting down completely and filing for bankruptcy.

Brower said the airline’s assets were needed to guarantee companies could step in to replace Ravn in order to move food and medical supplies for the borough’s residents.

But in a prepared statement on Tuesday, Clarkson said Brower’s order is “counterproductive” and complicating the ongoing bankruptcy proceedings. Those proceedings could lead to investment for Ravn that could help pay money owed to company employees that were laid off, along with establishing substitute service.

Clarkson says the state appreciates the borough’s goal of establishing substitute service. But that will be more difficult as long as local governments are attempting to seize Ravn’s property, Clarkson added.

Clarkson says that Ravn’s property is part of its bankruptcy estate, which means the borough’s emergency order is void under federal and state law.

A borough spokesman did not immediately respond to a request for comment.

 

Original story — April 7, 2020 — Lex Treinen, Alaska Public Media

The North Slope Borough’s government says it is taking possession of all of RavnAir Group’s planes and other property within the borough’s boundaries in order to guarantee continued air service to the region.

Until last week, Ravn was the sole passenger air carrier to several North Slope villages. On Sunday, the company announced that it was shutting down all operations and filing for bankruptcy.

In an emergency order signed Sunday by Mayor Harry Brower, the borough says that under its authority during a disaster declaration, it is “commandeering” all of Ravn’s “hangars, equipment, operations manuals, parts, supplies, vehicles, (and) airplanes.”

The order also says that the North Slope Borough can take possession of “intangible assets,” such as security codes and leases.

“The borough must, in this time of disaster, ensure that its residents have food, medical supplies, and medical transport,” the order says.

Ravn’s ground crew, hangars and equipment were still being used through Sunday in Utqiagvik, the North Slope’s hub community, according to Matt Atkinson, a part-owner of Wright Air.

Wright Air has taken over Ravn’s routes on the North Slope, and on Sunday afternoon, Atkinson said Wright had hired five of Ravn’s ground crew to keep the flights going, but hadn’t yet secured access to facilities.

Borough officials couldn’t immediately be reached to explain the practical effect of the order; a North Borough spokesman didn’t immediately respond to a request for comment. RavnAir Group did not immediately respond to phone calls or emails.

The North Slope Borough had an estimated 9,800 residents in 2019, according to the U.S. Census Bureau, with about half living in Utqiagvik. The rest live in the North Slope Borough’s seven other communities of Anaktuvuk Pass, Atqasuk, Kaktovik, Nuiqsut, Point Hope, Point Lay, and Wainwright.

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