Archive for Thursday, August 15, 2002

Hooters chief mulls Vanguard bailout

August 15, 2002


— Fly the friendly skies, indeed.

The man who runs Hooters restaurants is thinking about buying Vanguard Airlines, the Kansas City, Mo.-based discount carrier that shut down and filed for bankruptcy last month.

A bankruptcy judge on Wednesday approved a plan by Robert H. Brooks to give Vanguard $50,000 per week for the next three weeks. The money will keep a skeleton staff at Vanguard to work on plans to get the airline flying again.

The cash also buys time for Brooks to examine the company's books to see if he wants to invest in it or buy it outright, according to A.J. Block, an Atlanta attorney for Brooks.

Brooks started a firm called Hooters Air Inc. to make the payments.

"What he's doing is investigating toward some investment or acquisition relating to Vanguard," Block said.

Vanguard suspended flights, laid off 90 percent of its employees and filed for Chapter 11 bankruptcy protection on July 30. Even though it has been looking for a bailout, Vanguard president and chief executive officer Scott Dickson told employees in a letter that "it is likely this is a permanent shutdown."

Vanguard attorney Dan Flanigan said Brooks' interest came out of the blue.

"He came out of such an unusual place no one would have predicted it would be him we would be talking to at this point," Flanigan said.

If Brooks doesn't buy Vanguard, it's not immediately clear whether the airline is likely to find any other suitors.

Flanigan said he believed discussions are happening with other potential investors, although he said he did not know details of those discussions.

Vanguard served Myrtle Beach, S.C., where Brooks lives.

"So he is very much a supporter of Myrtle Beach, and the termination of Vanguard was disturbing to all of Myrtle Beach," Block said. Brooks also has a strong interest in aviation and owns an airplane, although he doesn't fly it himself, Block said.

Brooks is chairman of Hooters of America Inc., which owns or franchises 315 beach-themed restaurants known as much for the orange short-shorts and tight T-shirts of its waitresses as for its cuisine. He founded Eastern Foods Inc. in 1966, which makes dressings and sauces.

Vanguard had never shown a yearly profit. But 9-11 made its problems worse, and it became one of three airlines to file for bankruptcy since the terrorist attacks. The others were US Airways, on Sunday, and Midway Airlines.

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