Chapter 11 Filing Puts Wrongful Death Suits On Hold

The father of one of the passengers fatally injured in the crash of Colgan Air Flight 3407 has been placed on the creditors committee as part of Pinnacle Airline's bankruptcy proceedings. Twenty-three wrongful death cases were put on hold when the company filed for Chapter 11 reorganization April 1st.

The bankruptcy trustee has appointed John Kausner to the board that will negotiate with Pinnacle's attorneys as the case moves forward, according to a report in the Wall Street Journal. Kausner's daughter was aboard flight 3407 when it went down, fatally injuring all on board. The company had settled 24 claims that were filed after the accident, but the others remain in litigation.

One attorney representing several of the families said that the bankruptcy filing means that those seeking damages in the cases yet to be decided will likely not receive what they might have before the filing. But, Justin T. Green said that the pending cases, which could amount to tens of millions of dollars, could also make it more difficult for Pinnacle to emerge from bankruptcy.

Pinnacle said in a statement that the lawsuits  "will be addressed in the course of our Chapter 11 proceedings." The airline is not allowed to reject the claims because of the filing.

Delta, which has loaned Pinnacle $30 million to continue to operate as Delta Connection while the bankruptcy works its way through the courts, declined to comment.

Mr. Kausner told the paper that the families are reluctant to shift their complaint solely to one against the airline's insurance company, which might not pay punitive damages. He said that there might be some satisfaction in driving Pinnacle out of business.

The NTSB found that pilot error was the probable cause of the accident, but also cited poor safety standards as a contributing factor. That report is not admissible as evidence in court.

FMI: www.pinnaclerestructuring.com