A judge placed Presidential Air and six other companies owned by Orange County businessman Ray Novelli into receivership Tuesday to satisfy the claims of a creditor.
Barclay Law Corp., a Newport Beach law firm that had performed work for Novelli in the early 1990s, requested the action to force the businessman to make good on more than $60,000 in unpaid legal bills. The Orange County Superior Court order allows the receiver to take control of the finances of the companies and search for assets to satisfy Barclay’s claims.
“We tried less drastic steps and they weren’t successful,” attorney John Barclay said. “We felt this was necessary. . . . We just want to get paid the money that we’re owed.”
Novelli vowed Tuesday to have the receivership order overturned in court. He alleges Barclay performed shoddy legal work and that he withheld payment for that reason.
“If I took a car to a mechanic and it didn’t run when I got it back, I wouldn’t pay,” Novelli said. “The same thing applies here.”
Novelli founded the cut-rate carrier Presidential Air last fall with a couple of leased planes and $4 million in loans and credit from vendors. Based in Long Beach, the carrier provided nonstop service between Long Beach and Houston at bargain basement prices.
But the venture was short-lived. Novelli said the carrier suspended service April 8 after maintenance costs on the leased Airbus jets proved prohibitive.
The receivership isn’t Novelli’s first brush with the legal system. He served five years in federal prison for a conviction on conspiracy to commit mail fraud and pleaded guilty to defrauding a savings and loan following a Texas construction kickback scandal in the 1970s.
The other businesses put into receivership are: President’s Travel Club, All Seasons Resorts Inc., Adventure Resorts of America, Fiesta Resorts Inc., Guardian Publishing Co. and Revcom Motor Coach. Those business are all involved in the motor home recreation industry and are based in Newport Beach, according to court documents.