Former contractor sues - Cree airline faces bankruptcy

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The president of the native-owned Cree Airways says he and his company are being pushed to the brink of bankruptcy because of a lawsuit which he says led to the seizure of assets and the freezing of the company's bank accounts.

The company, which began offering flights to northern Alberta in August, received a lawsuit from a former marketing manager and Edmonton city police Const. Randolph Kim Klonkeid. Klonkeid is claiming $185,167.80 for alleged breach of contract says Roland Calahasen.

"Because of a mix-up, we didn't file the statement of defence so he (Klonkeid) received a default judgment," said Calahasen.

After the judgement, Calahasen says a court officer arrived at the company's hangar at Edmonton's Municipal Airport Oct. 13 and seized assets.

"This is why we are not flying," he said. "We have the money, we have the planes, we have the licences, we have the equipment but we just cannot operate right now," said Calahasen.

The company has been forced to lay off staff from 26 employees to four pilots and two secretaries. And treasurer Garnet Chalifoux estimates it has cost the company more than $200,000 in lost revenue since the company ceased operation in October.

He and the other members of the executive are bitter, angry and feel betrayed by the Alberta government.

"How would anyone feel when they sink $300,000 of your own money to start a company and this happens?" said Calahasen. "We did not receive any government funding ? we went it on our own."

Calahasen says he has contacted government departments and MLAs for the northern areas they serve, but have not received any assistance.

"It seems they're all against us," said Chalifoux. "Now we can't fly into Wabasca-Desmarais because we need a radio beacon. We are losing about $21,000 a week because of that," he said.

Const. Klonkeid was unavailable for comment at press time, however, lawyer Bruce Proulx who represents Klonkeid says the lawsuit was not the main cause of Cree's problems.

"They (Cree Airways) have a slow down, but not because of our lawsuits; they have other difficulties," he said.

A hearing to appeal the default judgment will be heard today. If it is successful Calahasen says Cree Airways will be "back in the air the very next day."

Cree Airway's lawyer Gary Teeling was also unavailable for comment at press time.

Cree Airway's six Cessna light planes serve Slave Lake, High Prairie and Wabasca-Desmarais.