Judge Ousts Seaborne Airlines Executives, Orders Trustee to Oversee Troubled Chapter 11 Sale

CEO Steven Rossum and CFO Pedro Motta were removed from control of Seaborne’s Chapter 11 case after failing to prove that stalking horse bidder STK I US LLC could afford the sale, prompting a judge to label the proceedings “bordering on inept.”

A trustee will now oversee the sale of Seaborne Airlines, after a Florida bankruptcy judge said the company's senior management could not be trusted to competently handle the process.

In a Tuesday hearing before Judge Peter Russin to discuss and finalize bid procedures ahead of a proposed auction on July 1, the court was not pleased with the failure of Seaborne representatives to provide evidence demonstrating whether the current stalking horse bidder – STK I US LLC – is actually able to afford the purchase.

During the course of the hearing, the court was informed that Nella Airlines, the parent company of the stalking horse bidder, is not currently operational. “Saying it's an affiliate of Nella Airlines is a little bit like saying it's an affiliate of the wizard in the Wizard of Oz,” said Barbra Parlin, counsel for Kenn Borek, the company from whom Seaborne leases its only plane. Nella Airlines currently “doesn't exist,” said Ms. Parlin.

Counsel for Nella Airlines was not able to provide much assistance. The attorney had only just been hired, the court learned, and did not have any documentation on hand to prove her client's bona fides.