Hooters owner offers to buy Vanguard assets

Posted 7:29AM on Saturday 21st September 2002 ( 22 years ago )

KANSAS CITY, MISSOURI - A group headed by the owner of the Hooters restaurant chain offered Friday to buy some of the assets of bankrupt Vanguard Airlines Inc. Hooters Air LLC, led by Hooters of America chairman and owner Robert H. Brooks, hopes to establish a new commercial airline based in Kansas City. Hooters Air would not reveal details about the plan, including how much it offered Vanguard's board of directors for the assets Friday. But Hooters spokesman Mike McNeil said the figure was a ``very small part of the overall funding'' to restart the airline. All of Vanguard's airplanes were leased, but Hooters Air plans to buy assets such as airplane parts, ground equipment, furniture and fixtures. Aviation analysts said the main asset that any potential buyer would want through the bankruptcy process is Vanguard's operating certificate. Scott Dickson, Vanguard's chairman and chief executive officer, said he could not reveal details of the proposal, which he said was confidential. ``We'll review it internally with our board. If it's appropriate we'll involve the court and creditors in the process,'' Dickson said, adding that he expected the internal review to take a few days. A hearing is scheduled for Wednesday in U.S. Bankruptcy Court in Kansas City on a request from Vanguard to sell about $4.6 million in assets - some of which Hooters Air wants to buy. Hooters Air already has given Vanguard about $50,000 per week since mid-August to maintain a skeleton staff while it considered whether to buy the assets of the low-fare carrier, which shut down and filed for Chapter 11 bankruptcy protection July 30. Hooters Air said it hoped to use former Vanguard employees to build the new airline. More than 1,000 workers were laid off when Vanguard closed. Hooters Air did not say how many routes the airline would fly, though Brooks' attorney, A.J. Block, has said in the past that it would fly about five of Vanguard's current routes. Vanguard had served 18 cities. ``As commonly known, and despite the financial problems of many airlines, the focus of Hooters Air has been to find value in a company and maximize its potential, with a goal of bringing Hooters service principles of quality and friendliness to the airline industry in Kansas City,'' Hooters said in a news release Friday. McNeil said Brooks was not available for comment Friday. In the release, however, Brooks said he now believes he will need ``support from other sources to build the kind of airline I desire.'' McNeil said Brooks means that he would need to bring in additional equipment and expertise from the airline industry. He was not referring to financing, McNeil said. Terry Trippler, a Minneapolis-based travel analyst, said the news was good for Kansas City and for consumers. ``Of course, the jokes will abound. They'll be all over the place because it's Hooters,'' Tippler said, adding that he believed some people would be turned off by the name while others would fly the airline out of curiosity. Michael Friedman, airline analyst with Minneapolis-based American Express Financial Advisors, said he didn't understand why anyone would want to buy an airline. ``There's been a lot of jokes about the fact that it's Hooters, but I don't know why anyone would want to buy an airline in such a competitive marketplace without a competitive advantage,'' Friedman said. Brooks founded Eastern Foods Inc. in 1966, which makes dressings and sauces. Hooters was founded in 1983, and Brooks and a group of Atlanta investors bought expansion and franchise rights for the chain in 1984. Brooks eventually bought majority control and became chairman. Vanguard, founded in 1994, had never shown a yearly profit. But terrorist attacks on Sept. 11, 2001, made its problems worse, and it - along with US Airways and Midway Airlines - have filed for bankruptcy since the terrorist attacks.

http://accesswdun.com/article/2002/9/189876