Quartz Mountain Aerospace sued by Altus bank
Associated Press, January 22, 2009
ALTUS - An aircraft maker that received millions of dollars in state aid has fired most of its employees and is being sued for defaulting on more than $450,000 in loans.
Altus-based First National Bank is seeking foreclosure of Quartz Mountain Aerospace. It wants the company to sell equipment it used as collateral for the loans.
The company laid off most its employees in November, just months after receiving its production certificate from the Federal Aviation Administration for its trademark four-seater, the Model 11E.
About a dozen of the fired employees have filed with the Oklahoma Department of Labor, claiming their insurance premiums and other wage garnishments that were taken from their checks were not passed on to the proper authorities.
Mark Arciero, chief executive officer of the Altus-based aircraft maker, did not immediately return calls for comment Thursday.
Company executives have said they expect to secure a $120 million bond package, in which case the cut employees would get their money due and lenders would begin to see regular payments again.
Catherine Coke, city attorney in Altus, said the city will continue to be patient as it awaits repayment of the loans it awarded to QMA, as well as other incentives delivered to the company in the name of job creation.
"We've been assured that they're getting money and that money is forthcoming," Coke said. "At this point we're just waiting on the money."
The bank's legal action also names First State Bank of Altus, the Oklahoma Industrial Finance Authority, the Altus Municipal Authority and Universal Funding Corporation as co-defendants.
Dennis Vernon, a vice president at First National Bank in Altus, said the bank invested in QMA "in the spirit of economic development and public support."
"It was a project we certainly wanted to see be successful because it meant so much to the citizens and the job market in southwest Oklahoma," he said.
Company officials said early last year they intended to build about 130 planes by the end of 2008 and another 385 planes in 2009. Arciero said at the time that he hoped to double the company's work force from 100 to 200 employees.
The company has benefited from several state and local economic development incentives. Among them are Quality Jobs, a state program that provides tax relief to companies that meet certain wage requirements and health-benefit requirements.
It also has received $9.5 million in loans and infrastructure from the Altus Municipal Trust Authority and $32 million in financing through Oklahoma's rural venture capital tax credit programs.