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September 24, 2018


Flight Risk

The Seminole Tribe's effort to resurrect a 1950s sport plane was an expensive lesson in the challenges of plane-making.

Ken Ibold | 5/1/2005
There's an old saying in the aviation industry that if you want to make a small fortune building airplanes, start with a big one.

In the mid-1990s, the Seminoles -- then headed by Chief James E. Billie, an avid pilot -- were looking for ways to diversify the tribe's holdings. Billie led the tribe into aviation: The tribe decided to upgrade and manufacture the Meyers 145, a two-seat sport airplane that had originally been designed in the 1950s.

With the venture under the newly created corporate banner of Estumkeda Ltd., the tribe got to work -- and soon found itself burning through big chunks of cash.

First, a Texas company that held the rights to the Meyers name sued Estumkeda, which subsequently changed the airplane's name to the Micco (after Billie's son). Then there was the expensive process of getting the Federal Aviation Administration to issue what's called a "type certificate," the necessary approval for the improvements and modernization of the Meyers' original design. In a separate process, the FAA also had to approve the manufacturing process as well, which is called a production certificate.

By the time the first Micco SP-20 rolled out the door of the tribe's manufacturing facility at the St. Lucie County International Airport in early 2000, the design, factory and federal approvals had cost Estumkeda about $10 million.

With a sticker of about $150,000, the SP-20 carried an entry-level price tag while promising sporty performance. In the end, however, the plane couldn't deliver the 200 horsepower it had promised. But Estumkeda was already working on plans for a higher-performance, $200,000 aerobatic model, the Micco SP-26.

Meanwhile, however, in early 2001 -- shortly after it got federal approval to sell the airplanes -- the Seminole Tribe had ousted Billie amid a sexual harassment claim and a series of federal investigations into the tribe's handling of federal grant money.

Many Seminoles had viewed the airplane project as Billie's personal pet project. With him out of the picture, the tribe eagerly began searching for a buyer for Micco. Then-Micco President F. DeWitt Beckett and aviation consultant Jack Karibo tried to piece together a deal to buy the business for $1.5 million, but a meeting to finalize the plan never occurred.

"I don't really know what happened," Karibo says. "There was supposed to be a meeting, but there just wasn't. I don't know if it was just the Seminoles saying they didn't want anything to do with Beckett or what."

The Micco production line shut down in 2002 after the company had sold a total of 18 airplanes for about $3.6 million -- far short of the 75 to 80 per year called for in the business plan. The Seminoles were some $24 million in the red on the venture. At its peak the factory employed 97 people.

A potential buyer emerged in the form of a Bangladeshi immigrant named Wadi Rahim, an entrepreneur who in 2002 had bought the assets of Lake Aircraft Co., a 50-year-old company that produced amphibious flying boats from a factory in Sanford, Maine.

Former Lake Aircraft owner Armand Rivard told Rahim about the Micco facility in Fort Pierce, and Rahim struck a deal with the Seminoles in April 2003 and moved Lake Aircraft and several key employees to Florida.

In the process, Rahim began shifting assets among holding companies and pledged Lake Aircraft assets against the debt owed to the Seminoles for the Micco purchase. The problem was, Rahim already owed Rivard $8 million from the Lake Aircraft purchase -- and had pledged those same assets as collateral to Rivard.

Rivard and the Seminoles sued Rahim, and on June 25, 2004, Rahim arrived at work to find the locks changed on the Micco factory. Production of both the Micco and the Lake airplanes came to an unceremonious halt.

Rahim countered by saying Rivard provided fraudulent information at the time of the Lake Aircraft transaction. In late 2004, the court sided with Rivard and Estumkeda. The assets of Lake reverted back to Rivard, and the Micco assets went back to the Seminole Tribe. Attempts to locate Rahim for comment were unsuccessful.

Micco's assets went on the auction block Jan. 15 through Certified Auction Co. of West Palm Beach. They were also listed for sale on the internet auction site eBay with a starting bid of $100,000 but failed to draw an online bid. A live auction was more successful, however, with a telephone bidder reportedly agreeing to pay more than $1.1 million for the factory equipment and type certificate. The auction company refused to identify the high bidder, and Seminole Chief Operating Officer Stan Rodimon said in mid-March it would be premature to comment because the deal had not yet closed.

As for Rivard, he is talking to several parties about taking over manufacturing of Lake Aircraft, a business he owned for more than 35 years.

"I'm going to do a deal," he says. "Unfortunately, it might be with an offshore company. I'd really like it to stay in the country, but I'm 70 years old, and that's too old to start over again."

Tags: Southeast

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