Silver State Helicopters

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Silver State Helicopters
Type	Private
Founded	1999, Las Vegas, NV
Headquarters	500 East Cheyenne Avenue, North Las Vegas, Nevada
Key people	Jerry Airola, Founder, CEO
Industry	Aerospace
Website	SilverStateHelicopters.com(Website no longer in service)

Silver State Helicopters was a helicopter flight training, sight seeing tours and charter air operator.

The company was founded in 1999, flying Robinson R-22 helicopters in the training role. It quickly became noted for the use of aggressive sales tactics to attract students to its programs.^[1]

Silver State Helicopters expanded rapidly and reported revenues of USD$40.7 million dollars in 2005 and USD$78.1 million dollars in 2006.^[2]

Silver State Helicopters ceased operations and entered bankruptcy on February 3, 2008. ^[3]

Contents 1 History 1.1 Bankruptcy 2 Former Management 3 Jerry Marvin Airola 4 Litigation 4.1 Phoenix case 4.2 Las Vegas case 4.3 Company response 5 Fleet 6 Expansion 7 Incidents and accidents 8 References 9 External links

[edit] History

The company was founded in 1999 at Henderson Executive Airport with one Robinson R-22 helicopter.^[4]

The original three owners were later bought out by their partner, Jerry M. Airola.

In 2002, Silver State began expanding into other helicopter operations such as external load (FAR Part 133) operations and subsequently on demand air-taxi operations (FAR Part 135) operations through their acquisition of Vista Helicopter Services in Las Vegas, Nevada. Vista Helicopter specialized in lucrative golf course charter flights among other helicopter charter services.^[5]

In 2007, Silver State Helicopters expanded into the agriculture field with the purchase of Central Washington Helicopter. Silver State's intent was to give their students a chance to gain experience while allowing current pilots opportunities to advance their careers.^[6]

Later in 2007, Silver State Helicopters partnered with New York private investment firm, Eos Partners which essentially created Silver State Services Corp. The plan was to give Silver State the opportunity to grow at an accelerated pace in the areas of flight training and other commercial operations.^[7]

[edit] Bankruptcy

Silver State Helicopters filed a petition with the US Bankruptcy Court for liquidation under Chapter 7 of the bankruptcy code and ceased all operations on February 3, 2008, at 1733 hours Pacific Standard Time.^[3]

At the time operations ended, the company had more than 800 employees and 2500 students. Employees of the company had no warning of the bankruptcy filing and all had their employment terminated on the same date. Students have been left with millions of dollars of debt.^[1]

The company released a statement saying that the closure without warning was due to “a rapid, unprecedented downturn in the U.S. credit markets” which had curtailed the availability of student loans for the company’s students and that this then resulted in a “sharp and sudden downturn in new student enrollment.”^[1]

Silver State Helicopters' assets were listed at USD$50,000 following the bankruptcy filing. Silver State Helicopters owes 5,000 creditors between USD$10 and USD$50 million dollars.^[2]

As of mid-February 2008 former Silver State students and their attorneys were planning class-action lawsuits against the company and its owner Jerry Airola. They announced that they may also sue the banks that lent student loans due to the high interest rates and terms of the loans.^[8]

On February 21, 2008 it was announced that several class action lawsuits have been commenced against Silver State and student loan lenders with the aim of getting immediate relief for students burdened with unpayable debts. ^[9]

Nicole Moon, spokesperson for Nevada Attorney General Catherine Cortez Masto, indicated that the Nevada Bureau of Consumer Protection is investigating potential criminal charges against Silver State President Jerry Airola. Some of the other 16 states in which Silver State Helicopters had bases are also examining pursuing criminal charges.^[9]

In response to media requests for interviews in mid-February 2008, a spokeswoman for Jerry Airola indicated: "Jerry will not be making any public appearances or public statements at this time."^[9]

The company websites were all removed by February 6, 2008. On February 26, 2008 a special website for the Trustee for Silver State Helicopters Bankruptcy was launched. It lists 194 helicopters and five fixed wing aircraft for disposal.^[10]

On March 11, 2008 there was a federal bankruptcy hearing regarding the company held in Las Vegas. About 200 former students of the company were there to confront Airola, but he did not appear in person. Media reports indicate that he has been unavailable for interview, meetings or comments since the bankruptcy filing and has been avoiding all public appearances.^[11]

Key Bank, who was a primary lender for student loans for Silver State students, has been named by Pinnacle Law Group of San Francisco representing two former Silver State students in a California law suit as of 14 May 2008. The suit alleges that the bank and Silver State colluded to "ensnare" students to take out loans and pay Silver State the full amount of USD$69,900 for their future flight training in advance. The Pinnacle suit also alleges that the bank "intentionally omitted" federally required consumer protection clause in the loan documents. "We hope to obtain an injunction preventing the bank from enforcing its promissory notes and from contacting credit agencies regarding the notes," stated Pinnacle attorney Kevin Rooney.^[12]

On 23 May 2008 US Senator Bill Nelson (D-Fla) called for a Federal Trade Commission investigation of Silver State, indicating that he believes that it was a Ponzi scheme. Senator Nelson said:^[13][14][15]

“

"What Silver State was doing was taking the $70,000 up front and then it was using it immediately and they were trying to go out and recruit more students to get more $70,000 per student and therefore pay expenses as they went along with the money they were collecting from the students. Now if that's what this investigation ends up being, what that is a ponzi scheme."[15]

”

[edit] Former Management

Officer	Office
Jerry Airola	Founder and CEO
Steve Pickett	Chief Financial Officer
Rick Reyes	Chief Operations Officer, Flight Training
Nathan Todd	Chief Operations Officer, Commercial Operations
Doug Swenson	Chief Technology Officer
Robbie Cunningham	Chief Administrative Officer
Tim Nelson	Chief of Staff.[16]
Gina Paglione	Vice President of Legal Affairs[17]

[edit] Jerry Marvin Airola

Jerry Marvin Airola was the founder and CEO of Silver State Helicopters. Born in Calaveras County (near San Francisco, California) in 1965, Airola married at the age of 18 and later attended the police academy in Modesto, CA in 1990. After graduating, he was hired as a police officer in the town of Los Banos, CA, where he served as a patrol officer from 1991 to 1993. ^[18]

Before leaving California for Las Vegas, Nevada in 1995 (where he then founded Hague Quality Water), he was sworn in as a reserve deputy sheriff for the Tuolumne County, California Sheriff's Department, allowing him to retain his peace officer status. Airola filed for divorce in 1998, and in 1999 sold Hague Quality Water of Nevada, LLC to Lance K. Henderson.

Airola was also sworn in as a Reserve Deputy Sheriff with the Merced County Sheriff's Department in California in 2004, but was released from duty after a regulatory audit revealed that he was not eligible to remain on the reserve because his primary residence was in another state. During his campaign for sheriff, Airola repeatedly stated he was currently a sworn deputy sheriff. In an investigative report, Las Vegas journalist George Knapp discovered he was no longer a deputy sheriff in Merced County and received written confirmation from the department saying he was only a reserve deputy sheriff for less than one year. ^{[19] [20]}

In 2006, Airola ran for Sheriff of Clark County, Nevada, but ultimately lost to Douglas C. Gillespie.^[21][22]

Jerry Airola lead Silver State Helicopters with the cooperation of EOS Partners.

[edit] Litigation

Silver State Helicopters has had numerous lawsuits filed against it, in numerous states across the country.

[edit] Phoenix case

In one case reported by the Las Vegas Business Press, a case was filed in the U.S. District Court in Phoenix, plaintiffs claimed Silver State failed to deliver on its promise to train aspiring helicopter pilots.^[17] The case was dismissed in April of 2007 but the parties involved are negotiating to reach a settlement.^[17]

In the Phoenix case, 18 plaintiffs were demanding a USD$5 million minimum, not including attorney fees, for their failed promises by Silver State training schools in Arizona. ^[23] One of the plaintiffs, Paul Mischel, in the suit claims he refinanced his house in order to pay a $55,000 USD loan to pay for 7 helicopter certificates/ratings which were supposed to be completed in 18 months, as advertised by Silver State Helicopters. 27 months into the program and he only had 3 of those certificates, which he claims are worthless.^[17]

Mischel, and other plaintiffs claim, the school they attended did not have adequate equipment and resources to teach a class with 78 students. The school did not have enough helicopters, simulators and instructors.^[17]

Mischel claimed he never completed his training but the way the loan was structured through Key Bank, the banking institution already paid Silver State the full amount in 10 months. In one of the more recent lawsuits, filed in June in the U.S. District Court in San Diego, 21 plaintiffs claimed Airola often made promises he didn't keep. The plaintiffs are asking for refunds of their tuition, which range from $50,000 to $75,000 per student. Silver State Helicopters claims it has reimbursed 19 of the 21 students involved in the San Diego lawsuit.^{[17] [24]}

[edit] Las Vegas case

In similar lawsuits filed in District Court in Las Vegas, two students claimed Silver State Helicopters didn't provide them with enough flight time to complete their training. The company reimbursed their tuition and the suits were settled.^{[citation needed]}

[edit] Company response

Silver State has settled cases in the past, however, these cases usually involve confidentiality agreements so the details of the settlements remain undisclosed. Silver State claims only about 1 percent of students have filed lawsuits against Silver State, however, they won't disclose how many students the company has trained.^{[citation needed]}

Airola claims the lawsuits against him are the price of doing business. In the past three years the Better Business Bureau of Southern Nevada has received 16 complaints against Silver State Helicopters. Eleven were for contract disputes.^{[citation needed]}

According to the bureau's Web site, all of the complaints have been resolved or administratively closed, and the company has a satisfactory rating.^{[citation needed]}

[edit] Fleet

Silver State Helicopters fleet at time of bankruptcy:^[25]

Helicopters:

• 139 x Robinson R22
• 38 x Robinson R44
• 1 x Bell B206B-3
• 6 x Bell B206L-1 / L-4
• 2 x Bell 407
• 5 x Bell B222/B230
• 1 x Bell UH-1H
• 1 x Eurocopter SA315
• 2 x Hughes 500D

Fixed wing

• 3 x Cessna 172
• 1 x Cessna 414

[edit] Expansion

Silver State Helicopters had expanded at an unprecedented rate for a helicopter company, especially one that specialized in flight training. Its corporate headquarters was 500 East Cheyenne Avenue in North Las Vegas, Nevada and had flight academies located in:^[26]

1. Mesa, Arizona – Williams Gateway Airport
2. Glendale, Arizona
3. Tucson, Arizona
4. Camarillo, California
5. Chino, California – Chino Airport
6. Long Beach, California
7. Los Banos, California
8. Oakland, California
9. Sacramento, California – McClellan AFB
10. San Diego, California (El Cajon) – Gillespie Field
11. Pueblo, Colorado – Pueblo Memorial Airport
12. Fort Lauderdale, Florida
13. Jacksonville, Florida
14. Lakeland, Florida – Lakeland Linder Regional Airport
15. Melbourne, Florida
16. Atlanta, Georgia (Kennesaw)
17. Boise, Idaho
18. St. Louis, Missouri (Chesterfield) – Spirit of St. Louis Airport
19. Butte, Montana – Bert Mooney Airport
20. Helena, Montana
21. Las Vegas, Nevada
22. New Windsor, New York
23. Raleigh, North Carolina
24. Tulsa, Oklahoma – Tulsa International Airport
25. Salem, Oregon
26. Columbia, South Carolina (West Columbia)
27. Dallas, Texas
28. Fort Worth, Texas
29. Houston, Texas (Spring) – David Wayne Hooks Memorial Airport
30. New Braunfels, Texas – New Braunfels Municipal Airport
31. Ogden, Utah
32. Provo, Utah
33. Arlington, Washington
34. Tacoma, Washington (Gig Harbor)

Silver State had expanded their business into training potential Air Traffic Control candidates through their Air Traffic Control Academy in New Braunfels, Texas. Silver State claimed 13 of their 15 graduates from their inaugural class were offered employment with the FAA.^[27]

Silver State had planned to open another helicopter flight training academy location at Stewart International Airport, about 50 nautical miles (93 km) north of New York City, including establishing a shuttle service from Stewart to Manhattan by the end of 2007.^[28]

[edit] Incidents and accidents

This article incorporates text from the NTSB Aviation Accident Database, a public domain work of the United States Government.

On September 14, 2007 in Oakland, California, a Silver State operated R-22 Beta II N132SH crashed during a supervised solo flight by a student pilot during an approach to land with a 10-knot (19 km/h) crosswind. The student was not injured.^[29]

On September 12, 2007 in Long Beach, California, a Silver State R-22 Beta N965SH crashed while hovering. The student pilot lost directional control of the helicopter and the instructor was unable to regain control of the aircraft before impacting the ground.^[30]

On August 28, 2007 in St. Clair, Missouri, a Silver State R-22 Beta N143SH was being flown by a student pilot and crashed during a hovering turn near the ground. The student pilot was not injured.^[31]

On July 24, 2007 in Boise, Idaho a Silver State R-22 Beta II N147SH crashed during a practice autorotation. The student allowed the RPM to decay to the point where the instructor had to take the controls and attempted a run-on landing. The instructor struggled on the controls with the student pilot and hit the ground hard. The helicopter spun around and came to rest on its side. Both suffered minor injuries.^[32]

On July 3, 2007 also in Long Beach, California, a Silver State R-22 Beta N457SH crashed while performing a practice hovering autorotation. The student was conducting a practice hovering autorotation and crashed during the maneuver. The instructor was unable to regain control of the helicopter before the accident.^[33]

On April 21, 2007 in Van Horn, Texas, a Silver State R-22 Beta N971SH collided with another helicopter while maneuvering near the fuel pumps at Culberson County Airport. The Silver State pilot was attempting to make room for additional helicopters and got too close to another helicopter which was still running. The blades contacted each other. No one was injured.^[34]

On March 27, 2007 in Ponte Vedra Beach, Florida, a R-44 Raven II from Silver State at Craig Municipal Airport suffered a mechanical failure which led to loss of directional control.^[35] The loss of control led to a fatal crash of the aircraft which took the lives of the instructor Tamara Williams and student pilot Juston Wyatt Duncan, 24. The fatal flight was the first flight after a 100/300 hour maintenance inspection was completed which included a 30 minute test flight before returning the aircraft back into service. Tamara's sister Shannon filed a wrongful death lawsuit against Silver State Helicopters in August 2007.^[36]

On February 19, 2007 in Tucson, Arizona, a Silver State R-22 Beta N453SH crashed during a simulated emergency procedure. During the maneuver, the instructor was unable to overcome the grip the student had on the throttle to recover the aircraft. The aircraft landed hard and the main rotor impacted the tailboom.^[37]

On January 21, 2007 in Salem, Oregon, a Silver State R-22 Beta II N924SH crashed while a student pilot, conducting his second supervised solo flight, encountered a dynamic roll over situation. The student pilot was uninjured.^[38]

On October 8, 2006 in Upland, California, a Silver State R-22 Beta N821SH experienced an engine failure during departure from Cable Airport. The instructor took the controls from the private pilot and performed a successful autorotation. Neither pilot was injured. In a preliminary report by the NTSB, it appears the engine failure was due to a mechanical problem.^[39]

On September 24, 2006 in Skiatook, Oklahoma, a Silver State R-22 Beta N468SH crashed while being piloted by a student pilot attempting to take off for his first solo flight. The student pilot stated the helicopter became airborne much quicker than he expected while raising the collective lever. The helicopter rolled right then left and encountered a dynamic roll over situation when the left skid contacted the ground.^[40]

On August 19, 2006 in Havre, Montana, a Silver State Bell 407 N407SH crashed while performing a long line (sling) operation with an external load underneath. As the pilot approached the area where he was going to land the load, he inadvertently allowed the helicopter to settle into a vortex ring state (Settling with power) and impacted the ground. The helicopter bounced before coming to rest. The pilot was uninjured.^[41]

On August 11, 2006 in Boise, Idaho, a Silver State R-22 Beta N228SH sustained substantial damage following a practice 180 degree autorotation maneuver. During the maneuver, the instructor attempted to add power and initiate a go-around, however, the helicopter his the runway and bounced back into the air. The damage was not seen until after they landed and inspected the helicopter.^[42]

On July 28, 2006 in Chino, California, a Silver State R-22 Beta N475SH crashed while performing instruction for a student pilot doing hover turns. The helicopter spun, struck the ground and rolled onto its left side. Neither pilot was injured.^[43]

On June 15, 2006 in Vernal, Utah, a Silver State Bell 206L N265SH crashed almost immediately after takeoff from a landing zone approximately 7,500 feet (2,300 m) above mean sea level. The FAA inspector determined the pilot used the wrong chart to determine the helicopter's performance at that altitude which led to the crash.^[44]

On February 6, 2006 in Helena, Montana, a Silver State R-44 N7085U was intentionally crashed by its commercial helicopter instructor pilot in a successful attempt to commit suicide. The National Transportation Safety Board determines the probable cause(s) of this accident as follows: The pilot's intentional suicide. The unauthorized use of a helicopter and impairment by alcohol were factors.^[45]

On October 3, 2005 in Tucson, Arizona, a Silver State R-22 N926SH crashed during a practice 180 degree autorotation. The instructor was unable to recover from the student's error and performed an autorotation to the ground during which the helicopter skid on the ground. One skid dug into the soft ground and caused the helicopter to roll 3 times before coming to a stop. The instructor and student received minor injuries.^[46]

On September 20, 2005 in Baker, California, a Silver State R-22 Beta N957SH crashed during a positioning flight of new helicopters to their respective destinations. The flight originated at the factory when Silver State took delivery of 12 new helicopters. The accident pilot was assigned to fly his helicopter to North Las Vegas following 3 other Robinson helicopters. The aircraft were spaced about 15 minutes apart. The accident pilot departed Torrance Airport (Zamperini Field) at about 2:25 pm local time and was attempting to arrive in North Las Vegas by 4:00 pm. The normal flight time for this route in this type of aircraft would normally take 2.5 to 3 hours. The accident pilot flew into adverse weather conditions which included rain, low clouds, lightning and moderate turbulence. A California Highway Patrol pilot had warned the accident pilot earlier of the rain and lightning to the northeast of the accident pilot's route. The next morning the Silver State office determined the accident pilot did not reach his destination and initiated a search. The pilot was killed in the crash.^[47]

On August 27, 2005 in Boise, Idaho, a Silver State R-22 Beta N845SH crashed during a practice autorotation. The instructor noticed the student pilot allowed the RPM to drop to about 94 percent so he elected to take the controls and recover the helicopter. During the transition to taking the controls there was a struggle for the controls with the student pilot and the helicopter impacted the ground hard which caused substantial damage to the helicopter.^[48]

On May 25, 2005 in Jean, Nevada, a Silver State R-22 Beta II N192SH crashed during a practice 180 degree autorotation. The student allowed the RPM to drop to about 92 percent when the instructor tried to recover the helicopter. The helicopter collided with a fence then impacted terrain. Neither pilot was injured.^[49]

On May 23, 2005 in Provo, Utah, a Silver State R-22 Beta N553SH incident caused substantial damage to the aircraft following an instruction flight with an instructor and student pilot. During the practice maneuver, the low rotor RPM horn sounded and the student pilot released the controls. The instructor took the controls and attempted to recover, however, the struck terrain and rolled over.^[50]

On March 26, 2005 in Los Banos, California, a Silver State R-22 Beta N820SH suffered structural damage to the tailboom and fuselage following a practice autorotation. The student pilot was studying to become an instructor pilot also. At the conclusion of the autorotation maneuver, the student pilot attempted to roll the throttle back on and the engine immediately quit. The instructor took the controls and successfully landed the helicopter with substantial damage. The cause of the engine failure was determined to be the instructor's failure to add carburetor heat during a simulated engine failure, the instructions for which are outlined in the pilot's operating manual.^[51]

On February 22, 2005 in Spanish Fork, Utah, a Silver State R-22 Beta N780SH sustained substantial damage after hitting the ground hard following a practice 180 degree autorotation maneuver. Neither the student nor the instructor pilots were injured.^[52]

[edit] References

[edit] External links

• former location of Silver State Helicopters official website
• Silver State Bankruptcy website
• former location of Silver State Helicopters Flight Academy official website
• former location of Silver State Air Traffic Control Academy official website
• Silver State Helicopters Closes it's Doors (Out of Business!) Feb. 08 - Vertical Reference
• Silver State Helicopters Closes it's Doors (Out of Business!) Feb. 08 - Just Helicopters
• Swift Chopper Pilots for Truth: Jerry Airola, Exposed.
• EOS Partners