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Helicopter Students Left Hanging

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By BILLY TOWNSEND and TED JACKOVICS, The Tampa Tribune

Published: February 9, 2008

Updated: 02/08/2008 09:23 pm

LAKELAND - Students who invested $70,000 in flight training tuition with a Las Vegas-based company that filed for Chapter 7 bankruptcy Monday will be a low priority among all of the creditors, according to several lawyers.

In addition, some Silver State Helicopters LLC students, including those enrolled at Lakeland Linder Regional Airport, could face as much as $250,000 in student loan debt, including interest over the life of the loan. Recovering unused tuition is likely to become a complex legal matter for students, depending on how their loan contracts are written.

The large number of Silver State students - about 2,700 are reported to be involved in programs at 33 locations nationwide, including four in Florida - and the up to $190 million they paid in tuition, are likely to create a high profile case, said lawyer Paul R. Shankman of the Torrance, Calif., law firm James Andrew Hinds Jr.

"I've heard many students made tuition deposits in the past few months and then went to the locations and found the doors locked," said Shankman, who has been contacted by a half-dozen former Silver State students. "It would seem like there had to be some point where somebody knew the company was not doing well enough to continue take in loan deposits."

A Complicated Process

The Chapter 7 bankruptcy code places responsibility for investigating the case with a court-selected representative, and Las Vegas lawyer James Lisowski was appointed trustee in Silver State's Chapter 7 filing. A creditors meeting is scheduled for March 10 in Las Vegas. Lisowski would not comment Friday.

Creditors should be attentive to listings by the bankruptcy court, said Theresa Pulley Radwan, associate dean of academic services for the Stetson University College of Law in Gulfport. A proof of claim form for the case is available at nvb.uscourts.gov.

Once the trustee's investigation is complete, which includes the public session with the principals involved in the bankruptcy filing, assets of the company are disbursed according to priorities listed in federal bankruptcy code, said Noel Boeke, a partner with Holland & Knight's bankruptcy practice in the firm's Tampa office, which is not involved in the case.

That in general places unsecured creditors - the students - behind secured creditors, such as those with liens on equipment and employees owed wages.

Silver State's Chapter 7 filing listed assets of $50,000 or less and liabilities of between $10 million to $50 million. The Las Vegas law firm representing Silver State, Schwartzer & McPherson, directed requests for comment to Mass Media Corporate Communications, a Las Vegas public relations firm. Mass Media did not respond to questions e-mailed Thursday by The Tampa Tribune.

Students across the nation are communicating through a Web site, silverstatefamily .com, and informal meetings, including one that drew 50 former students to Lakeland on Thursday.

Richard Ogle, who followed his son, Matthew, of Wesley Chapel, into the program, said the family dreamed of relocating to the Caribbean and flying helicopters for a living.

Now they just want to recover as much as they can of the $210,000 they borrowed for tuition and find a place to finish their training.

None of the students said they'd heard anything from company officials.

For Many, Losses Exceed Tuition

Tampa lawyer Gene Odom talked with the group, but said he's not yet sure if any money can be recovered.

Students would need to both establish liability and find a defendant with money from whom to collect, he said.

Many of the students and instructors at the meeting described a sort of triple financial whammy in the school closing: loss of some or most of the investment in their training; new costs in finishing training somewhere else; and the loss of instructor jobs with the company, which many of the students said they were pursuing.

Such jobs acted as a sort of internship for graduates of the program, who are not very marketable as pilots until they log 1,000 hours of flight time, several students said.

Lakeland's branch of Silver State opened in December 2006, and only one student completed the 18-month program, students said.

But a number of students from the first class said they are within a handful of hours of graduating.

Reporter Billy Townsend can be reached at (863) 284-1409 or

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