Mesaba parent asks court to declare dividend payments appropriate

By Caroline Salls

Pittsburgh, Oct. 5 - Mesaba Aviation, Inc. parent Mair Holdings, Inc. filed a complaint with the U.S. Bankruptcy Court for the District of Minnesota for a declaratory judgment that the dividends and fees paid by Mesaba to Mair were appropriate under law in response to public speculation otherwise, according to a Mair news release.

"The dividends and fees Mesaba paid to Mair are legitimate, appropriate and legal," Mair president and chief executive officer Paul Foley said in the release.

"The public speculation that these dividends and payments were improper is unsupported by the facts, by the law and is damaging to Mair.

"We are asking the court to rule on this matter and put it to rest once and for all."

According to the complaint, every payment and dividend Mair received from Mesaba was appropriate under applicable law and occurred in the ordinary course of Mesaba's business.

The complaint said Mesaba was solvent at the time it made each payment and dividend, and that Mesaba remained solvent and able to pay its obligations after each payment or dividend to Mair.

Mair said 75% of the dividends in question were paid almost four years ago in 2002.

Mair said it believes that a positive ruling from the court in this matter will end public speculation about the transactions between Mair and Mesaba.

Mesaba, an Eagan, Minn.-based Northwest Airlines affiliate, filed for bankruptcy on Oct. 13, 2005. Its Chapter 11 case number is 05-39258.

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