COVID-19: Arctic borough’s seizure of bankrupt airline’s assets “counterproductive,” says Alaskan AG

Alaska Attorney General Kevin Clarkson said Tuesday that there’s no legal authority behind the North Slope Borough’s emergency order attempting to seize the property of a bankrupt airline within the borough’s boundaries.

Mayor Harry Brower issued the order Sunday, the same day that RavnAir Group, the state’s largest rural carrier, filed for bankruptcy in Delaware court.

Ravn provided the only passenger air service to some of the borough’s isolated villages.

Last week, the company announced the termination of nearly all of its flights to the more than 100 communities it served, citing a 90 percent reduction in ticket sales due to the coronavirus pandemic. On Sunday, it announced it was shutting down completely and filing for bankruptcy.

Brower said the airline’s assets — mainly a hangar — were needed to guarantee other companies could step in to replace Ravn in order to move food and medical supplies for the borough’s residents.

But in a prepared statement Tuesday, Clarkson said Brower’s order is “counterproductive” and complicating the bankruptcy proceedings. Those proceedings could lead to investment for Ravn that could help pay money owed to company employees that were laid off, along with establishing substitute service.

“The North Slope Borough does not have the authority to commandeer property,” Clarkson said in a prepared statement. “All Ravn’s property is part of its bankruptcy estate. This means the North Slope Borough order is void under federal and state law.”

Clarkson said the state appreciates the borough’s goal of establishing substitute service. But that will be more difficult as long as local governments are attempting to seize Ravn’s property, Clarkson added.

Brower, in a prepared statement, responded to Clarkson by noting that the borough has not taken any action in the bankruptcy case. He said the borough is using its “home-rule government charter rights to protect our people and region in time of a world pandemic crisis.”

Ravn officials did not respond to a request for comment Tuesday.