By Ryan Yousefi
By Chuck Strouse
By Terrence McCoy
By Terrence McCoy
By Terrence McCoy
By Michael E. Miller
By Kyle Munzenrieder
By Michael E. Miller
Her lawyer, Scott Silver, demanded that the probate judge enforce the settlement and strike the altered bylaws. But Judge Robert Newman, who had never acted decisively in the case, referred the matter to a "special master" who conducted a 30-hour hearing. The recommendation: Judge Newman should grant nearly all of Silver's demands. Meenan and Batchelor successfully appealed the appointment of a special master and forced the case back to Newman's court. But it did not stay there long.
Judge Newman tossed the dispute over to civil court, reasoning that it now involved arguments over company management, not disagreements about a will. Linda Harrington has been forced to start over in a new setting with a new judge, and that has given Meenan and Batchelor a new theater for combat. The two men have fought Harrington in other courtrooms as well. Meenan sued to foreclose on her house only months after she bought it from the estate. That suit was dismissed. The stepfather also has sued his stepson Stephen for a $10,000 debt; the suit is pending. Batchelor has sued to acquire the voting rights that Rich's children enjoy, and Meenan has sued to undo restrictions Jean Rich placed in her will that prohibit him from selling his shares of the company to anyone but her children.
The building that has housed Rich International Airways since its founding is soon to be bulldozed to make way for airport expansion, and the company has already moved on, having relocated most of its operations to an office building at NW 36th Street and 63rd Avenue. Rich International's cheery new newsletter, Charter Chatter, hails the move as a symbol of the airline's ability to overcome obstacles.
And indeed the airline has much to boast about. Since Jean Rich's death, revenues have grown enormously, from $25 million at the end of 1991 to more than $150 million by the end of 1995. It has no long-term debt. Its fleet of leased and owned airplanes has increased to twenty. And today it is the second-busiest charter service flying out of Miami International Airport, having carried 19,307 passengers in 1995.
But profits have not kept pace with revenues. Jean Rich reported an $810,000 after-tax profit on $25 million in revenues in 1991. But under Bill Meenan, despite earning twice and three times the revenue from 1993 to 1994, profits only slightly increased. For example, the airline reported only $1.07 million in after-tax profits in 1993 on $98 million in revenues.
In 1995 the airline's losses were colossal, totalling about $936,000, though revenues had soared to $150 million. Rich's general counsel, Mark Scheer, says that Meenan's business philosophy is to reinvest the profits in the company. But Linda Harrington alleges she's found plenty of examples of waste and poor management that explain the losses.
Harrington also alleges that the company has adopted questionable maintenance routines inherited from Batchelor, whose own charter airline, Arrow Air, has been shut down three times in response to the FAA's safety concerns. Most recently, in May 1995, Arrow agreed to shut down after an FAA investigation found that the airline had used unapproved foreign parts on some of its planes. The agency pulled the airline's certification, demanded a $1.5 million payment for its costs, and eventually recertified it after it fired five employees and re-established safety procedures.
Shortly after the FAA threatened to pull Arrow's operating certificate, however, Rich International also admitted, in a March 1995 letter to the agency, that it, too, had used unapproved parts on some of its planes. The matter languished for more than a year. Then this past May, after a ValuJet craft crashed in the Everglades, public outcry pressured the FAA to increase its scrutiny of low-cost air services. A month later FAA officials made an unusual public announcement of its intention to fine Rich International some $2.6 million. The charge: Airline employees had installed 75 unapproved parts from foreign planes on six of the L1011 aircraft it leases from Batchelor. Those six planes were not considered airworthy when flying "hundreds" of flights between March 1993 and March 1995, according to FAA documents. (The company will have an opportunity to contest both the fine and the investigative findings that prompted it.)
"By allowing Batchelor to supply Rich with planes, parts, and equipment through his various entities, Meenan has put Rich at risk of FAA action," Harrington charged in her April 1995 lawsuit against Meenan. Given the similarity between Arrow's and Rich's FAA record, Harrington's charge now seems almost prophetic.
Harrington says she's not done yet. After complaining over the years about alleged maintenance gaps and safety risks, she gave Meenan an ultimatum in a letter this past May: Investigate and solve the problems, or she'll go to the authorities.
Scheer answered with threats of his own, calling her warning a "self-serving" tirade and an attempt to "manipulate the affairs of the company for her own benefit."
Harrington shot back a letter to Scheer reiterating her threat: "I will wait no longer than 5:00 p.m. on Friday, the 17th of May, 1996, before passing all in my possession to the appropriate authorities."
Today Harrington says she's aware that federal regulators are investigating Rich International Airways, but she will not comment further. The investigation could shut down the airline and Harrington knows it. But she pushes on, hoping to oust Meenan and replace him with what she considers more professional management. And she continues to repeat her mantra: "I am Jean Rich's daughter, first and foremost.