A Department of Law opinion issued today states that the North Slope Borough doesn’t have the authority to seize the property of RavnAir, which had shut down operations and stated it would be filing for protection under Chapter 11 bankruptcy rules.
According to a statement from Maria Bahr, spokesperson for the Department of Law, “the North Slope Borough does not have the authority to commandeer property. All Ravn’s property is part of its bankruptcy estate. This means the North Slope Borough order is void under federal and state law. Any party seeking to operate air services also needs approval from the Federal Aviation Administration.
“The State appreciates the concerns of establishing substitute air service for all communities impacted by Ravn’s bankruptcy, including communities in the North Slope Borough. However, the North Slope Borough’s actions in this case were counterproductive. As long as local governments might be attempting to seize Ravn’s property it will be more difficult to establish replacement air service.
“In addition, more than 1,200 Ravn employees who were laid off on Sunday are unpaid and actions by local governments that impede the bankruptcy jeopardize those employees being paid.
“Ravn, the State, North Slope Borough, and other stakeholders are working diligently to establish substitute air service as quickly as possible and get Ravn’s former employees paid, all within the bankruptcy context. Any disruption by local governments makes those goals more difficult to achieve,” Bahr wrote.
Over the weekend, RavnAir Group announced it was grounding all flights due to financial hardships brought on by COVID-19 travel restrictions around the state.
Almost immediately, the mayor of the North Slope Borough issued a statement saying he was commandeering the assets of the company under his authority granted through his emergency orders during the COVID-19 crisis.