Dear Interested Party:
First, a few weeks prior to my appointment, virtually all employees of Trans Continental Airlines, Inc., had resigned. When we arrived, there was no one on the Trans Continental payroll. I have rehired the receptionist and the head of computer operations - how they will be paid is uncertain at this time - they had been without a paycheck for three weeks. I advanced them funds from my own pocket to meet the first week's payroll requirement. If you read between the lines - there are no liquid assets in the Company.
Other than the Church Street Station property, for which I am not receiver, but which is in foreclosure, there appears to be little or no equity in any meaningful assets. (Borrowings against those assets equaling or exceeding the value). The Church Street property, without a complete analysis of underlying debt does appear to have at least some equity but not enough to make a large difference in the overall picture. It may however, be a start.
To get a quick overview of what happened, I would strongly encourage everyone to read the very detailed complaintfiled by the State in this above case. A copy of the Complaint is available on this website. Since we have been inundated by the phone calls, I would encourage all to e-mail me instead at my address jerrym@t-con.com or to send your inquiries via regular mail to my attention. I will attempt to reply to all your inquiries BUT I urge that you be patient since this is very early in the receivership. I would also urge that if the inquiry or request is not urgent, please refrain from communicating at this time. Most items "are what they are" and an e-mail or phone call generally will not speed up or expedite any processes. When, and if, we need information from the investors, we will specifically request it.
We have established a web-site at www.t-con.com and will attempt to post periodic updates, as time permits and as for so long as my tenure as receiver lasts. We will also post "FAQs" ("Frequently Asked Questions"). The first of these has already been posted and is "on-line" and is attached to this letter.
We were prepared to mail out these individual letters to all investors, but delayed the mailing because of the recent, February 15, 2007, seizure of documents by several governmental agencies (including the F.B.I., I.R.S., F.D.I.C. and Florida Department of Financial Regulation) due to their continuing criminal investigations of Mr. Pearlman and the various entities. We would urge you to go the websites of certain media who have been providing excellent coverage of current happenings (such as the regulators' seizure of documents), including the St. Petersburg Times, http://blogs.tampabay.com/money/. This particular site is the "Blog" for Helen Huntley who has been covering the story. On the left hand side of the page is a listing of articles including Trans Continental News, Inc. and the Orlando Sentinel, http://www.orlandosentinel.com/news/local/orange/orl-pearlmansg,0,2411340.storygallery?coll=orl-news-headlines-orange. This links to all of the related stories on the matters printed in the Orlando Sentinel.
What affect this seizure will have on the Receivership remains to be seen, while these agencies have promised access to the records, the mechanics of the process has yet to be worked out. Hopefully, the process will not be impeded, but given the potential for recovery, I am, at this point glad to have the assistance of the Federal and State authorities.
Trans Continental, Inc.,
Gerard A. McHale, Jr.
Gerard A, McHale, Jr.,
Court Appointed Receiver