Business

Pace Airlines facing more legal problems

RALEIGH - A charter airline that once operated as Hooters Air has quit ferrying NBA stars and rockers as it struggles against lost contracts and a felony charge against its CEO for allegedly failing to make payments on his employees' group health insurance.

The U.S. Equal Employment Opportunity Commission on Wednesday added to the problems confronting Pace Airlines by filing a lawsuit on behalf of an Asian flight attendant fired three years ago after complaining only white workers were being promoted. The EEOC said it went to court after failing to reach a settlement on behalf of Chau Nguyen, who the agency said made several complaints of discrimination after missing out on promotion to lead flight attendant.

The lawsuit came a day after the private company's new owner and CEO, William Charles Rodgers, was charged with one count of willful failure to pay group health insurance premiums.

North Carolina law requires that companies give workers a 45-day notice before dropping health coverage. Rodgers, 59, of Liberty, Mo., was in the process of hiring an attorney, company spokesman Stuart Carnie said Wednesday.

The rarely used state law has been applied in 28 cases this year, up from about 10 cases in all of last year, but it almost never leads to an arrest, Insurance Department spokeswoman Kristin Milam said.

The policy covering nearly 340 workers was dropped after Pace on Friday failed to catch up with paying premiums. They had been two months in arrears since Rodgers bought the company in May from the estate of Robert Brooks, who built the Hooters restaurant chain, Carnie said.

Also Friday, Pace stopped flying chartered aircraft for clients, which have included the NHL's Carolina Hurricanes, rocker Bruce Springsteen, the White House press corps and dozens of pro and collegiate sports teams, Carnie said. All but about a half-dozen employees have been laid off.

"Right now, we've ceased operations, but in a legal standpoint the company is still in business," Carnie said.

Pace Airlines had been owned by Hooters mastermind Robert Brooks, who died in 2006 about three months after grounding Hooters Air. The Myrtle Beach-based airline operated for three years and at its peak served 15 destinations, including nonstop flights to the Bahamas, featuring the restaurant chain's trademark scantily clad waitresses but no onboard chicken wings.

Pace's downward spiral worsened late last month when Continental Airlines canceled a maintenance contract. Continental ended the agreement because of concerns about Pace's financial status. About two-thirds of its work force was laid off two weeks after the contract was canceled.

Once news of the company's woes came out, health insurance provider Blue Cross and Blue Shield of North Carolina demanded payment of the two months of insurance premiums in arrears, or about $446,000, Carnie said.

"There was no willful intent on the part of Mr. Rodgers to cancel the policy," Carnie said.

A Blue Cross spokesman declined to discuss Carnie's description of events.

The CEO was booked into the Forsyth County jail on the felony charge on Tuesday pending $50,000 bond. He was released by Wednesday morning, but jail officials said they could not speak about the case.

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