Sun Country files for bankruptcy protection
Sun Country Airlines, a Mendota Heights based company, filed for bankruptcy protection Monday in a move that separated the company from its majority stockholder, Tom Petters, the Star Tribune reported. Petters' other businesses have been taken over by a court appointee as part of a large fraud case led by the F.B.I.
Stan Gadek, Sun Country's CEO, clarified the reasoning for these chain of events.
"We're not in bankruptcy because of our business model being broken," Gadek said in an interview. "We are in bankruptcy because of the recent events at Petters Group Worldwide."
Gadek had been relying on an operating loan from Petters, who owns all the voting shares of Sun Country, to help the low-fare carrier pay its bills during the months of October and November, traditionally low travel months.
Petters' home and office were raided on Sept. 24, and he was put behind bars on Friday.
Gadek said the choice to file for bankruptcy was made over the weekend, since Sun Country did not want to be under the auspices of a court receiver.
Attorney Doug Kelley was appointed the Petters' receiver by a federal judge Monday, and he will take control of the assets of Petters' companies. Because of the filing, though, in U.S. Bankruptcy Court in Minnesota, Sun Country will be excluded from that court action.