OneJet lawsuit moved to federal court
Transfer of the case may be challenged
Two Allegheny County Airport Authority board members entangled in a state lawsuit over the collapse of OneJet have moved the litigation to federal court.
In a recent notice transferring the case, board chairman David Minnotte argued that the lawsuit filed by 51 OneJet investors, in which he is a defendant, is better suited in U.S. District Court in Pittsburgh than Allegheny County Common Pleas Court because of the ongoing bankruptcy involving the carrier.
Joining Mr. Minnotte in supporting the transfer was authority board vice chairman Robert Lewis, who also is a defendant in the lawsuit.
While the case is now in U.S. District Court, attorneys for the 51 investors may fight to have it moved back to state court.
Ryan Cooney, one of the attorneys, said Thursday he disagreed with the transfer, describing the connection between the lawsuit and the bankruptcy as “tenuous.” He said the lawsuit involves the solicitation of investments and noted that OneJet itself is not one of the defendants.
“We haven’t made a final decision, but it is likely that we will file a motion to” move the case back to state court, he said.
In making the case for the transfer, Eric Schaffer, Mr. Minnotte’s attorney, said the allegations in the lawsuit are intertwined with matters that may be investigated by U.S. bankruptcy trustee Rosemary Crawford.
He also argued that the issues raised in the complaint are “closely connected” with claims against OneJet and the bankruptcy case; that any potential recovery by the 51 investors directly impacts their recovery in the bankruptcy; and that the allegations in the lawsuit “give rise to a claim by Minnotte against OneJet.”
“The outcome of the action in the state court could conceivably impact the administration and handling of the bankruptcy case,”
the notice stated.
The lawsuit was filed against OneJet CEO Matthew Maguire, his father Patrick, Mr. Minnotte, Mr. Lewis, Boustead Securities and two of Boustead’s agents.
It alleges that the Maguires misrepresented the extent of their investment in the regional business airline; provided inaccurate financial statements and projections to potential investors; and “continued to misrepresent the financial stability and projected profitability” of the carrier through August 2018 even though it “was already in serious financial trouble.”
OneJet stopped flying Aug. 29.
The lawsuit also claimed that Mr. Minnotte and Mr. Lewis — both of whom invested more than $250,000 in the airline, according to Matthew Maguire — “used their positions on the board of the airport authority to influence the authority’s use of grant money for the benefit of OneJet.”
Authority solicitor Jeffrey Letwin has dismissed such assertions as “an absolute bunch of garbage.”
The airport authority gave OneJet $1 million in incentives to fly from Pittsburgh International Airport, but sued last year to recover $763,000 of it, claiming the airline failed to keep its promises regarding flights.
Mr. Minnotte, Mr. Lewis and another board member, Jan Rea, who also invested in the airline, have since divested their interests in OneJet.
Last fall, the board approved a policy banning investments in airlines by its members.
OneJet was forced into Chapter 7 bankruptcy last fall by four investors who are owed money by the carrier.