City May Sue to Recoup Losses From Troubled Air Show Organization

The city of San Diego will demand that Air/Space America re-pay about $250,000 in debts from the 1988 aerial extravaganza at Brown Field and will file suit against the financially ailing organization if necessary, the City Council decided Tuesday.

Conceding that there is little chance of ever recouping $100,000 in rent and an estimated $150,000 spent on repairs to Brown Field after the 1988 show, the San Diego City Council nevertheless voted unanimously in closed session to pursue the debts.

“We assume that they don’t have any money, but if they did, or if they are resuscitated in some form, we want to be on line,” said Councilman Bob Filner, the council’s most frequent critic of the air show’s organizers.

Plans for a second air show--scheduled to begin two days from today--collapsed April 18 when Air/Space America announced its cancellation because of financial and planning problems.

The show’s collapse threatened to initiate a new wave of lawsuits by companies that had contracted to perform services for Air/Space America. Nearly a dozen lawsuits were filed by unpaid creditors after the close of the debt-ridden 1988 extravaganza.

Air/Space America founder Bob Wilson, a former Republican congressman from San Diego, blamed the “city of San Diego bureaucracy” for thwarting a last-ditch attempt to find financing for the 1990 show.

City officials, who spent more than $186,000 promoting the 1990 Air/Space America show--money that the city will not attempt to recoup--called Wilson’s allegations a “smoke screen” meant to disguise the lack of financial backing.

The popular inaugural show two years ago left Air/Space America saddled with a $2.7-million debt. The city also filed suit and won a judgment for $30,033.78, though the debt has not been paid.

Three Air/Space America creditors have sued the city, seeking repayment of more than $1 million collectively in debts from the 1988 show, said Deputy City Attorney Deborah Hollingsworth. The first lawsuit is scheduled to go to trial in August. The city contends that it had an agreement with Air/Space America absolving it from responsibility for such claims, she said.

Tuesday, Air/Space officials did not respond to a message left on a telephone answering machine at their headquarters. But in the past two weeks, the organization has attempted to contact 170 exhibitors who paid up-front fees to display their wares at the planned 10-day trade show. Organizers had said that the show would attract thousands of potential buyers from around the world.

“We’re probably out $80 grand,” acknowledged Howard Ruggles, San Diego district manager for Hughes Aircraft, one of seven companies that in 1988 paid $100,000 to become a founder of Air/Space America.

Founders used up $20,000 of their initial payment for booth space at the premier show in 1988, and expected to use $20,000 at each of the biennial shows that Air/Space America had hoped to host during the next decade. Ruggles last week said he was uncertain if the company would sue to get its money back.

Word of the cancellation apparently was slow to spread to some exhibitors, including the China Great Wall Industrial Corp., which, last week was still sending parts of its exhibit to a holding warehouse in Los Angeles.

“I have another shipment coming in this morning,” said a Los Angeles-based freight forwarder for the Great Wall Corp., which produces rockets that carry satellites into orbit. “Nobody told me about any cancellation,” the freight forwarder said.

Air/Space America evidently has sent letters to some exhibitors, asking them to be patient. “We have received a letter that says too many companies are asking too many questions right now and they’re not prepared to answer them,” said Guodong Tian, a spokesman for the Great Wall Corp.

The state of South Dakota, which exhibited during Air/Space America’s premiere show in 1988, learned of the cancellation a week after the show was officially cancelled, according to a trade show industry source who asked that his name not be used. The governor of South Dakota is now considering legal action to win back the state’s down payment for the trade show, the source said.

As of last week, Air/Space America had yet to officially inform some contractors that the show had been canceled, said Chuck Hoover, whose Phoenix-based company had been hired to stage aerial portions of the planned air extravaganza.

Hoover, who heard about the cancellation “through the grapevine,” planned to turn his Air/Space America contract over to an attorney to determine his legal recourse.