At least 100 students enrolled in a South Florida flight school find themselves in a state of uncertainty after the owner of their flight school died in a plane crash, prompting the abrupt shutdown of operations.
The academy’s owner, Alfredo Diez, and his wife, who managed the operations, died in a March plane crash in Virginia while attempting to make an emergency landing.
According to local news outlet CBS Miami, after the crash, students received an email notifying them that all operations have ceased, leaving them uncertain of their educational and financial futures.
Samantha Fitzgerald, a lawyer representing the owner’s estate, told CBS Miami it is unlikely any refunds would be made due to the legal complexities involved. “It’s an extremely tragic and unfortunate situation. Since the flight school owners are all dead, the estate has to go through the legal process, and creditors are paid in a certain order. In this case, there are bank loans that are secured creditors and unfortunately, they are in a priority position over the students,” she said.
Meanwhile, attorneys representing some 20 students from Atlantis Aviation Flight Academy provided CBS Miami with a statement expressing sympathy for the family’s loss while highlighting the students’ predicament—noting that they fear for their future. “These students now have to claw back their monies from a school that is no longer viable and whose assets are presently being marshaled. Unfortunately, the students will now be required to find another school which is properly accredited which will hopefully understand that they have already paid once for their education.”
The matter is currently under the jurisdiction of the Broward County Probate Court.
Welcome to the late 70’s.
Many flight schools where going out of business everywhere. Many of us had to travel to airports far from home and in some cases move hundreds of miles to finish our training. This is just one school, the students will be fine they have a lot of options these days.
Yeah but I don’t think that’s the issue here. Heck Florida has long been one of the top states for numbers of local FBO flight schools and national academies (like Embry-Riddle and FlightSafety). The issue here is that the students paid for their training tuition up front and that money is now sunk. The lawyers and creditors get the first dibs (in that order as always).
You are probably perhaps referring to a closed FBO school on a pay as you go per flight hour schedule instead of thousands up front as was in this case. One person reported having lost $10K. You don’t just reset after that as a starving young pilot trainee.
Why would anyone pay tuition in advance? A quarter or semester is understandable, but longer is a warning sign.
Sad when kids are baited into paying up front if the school dangled a lower overall cost than elsewhere. Easy to speculate the school was likely on edge of bankruptcy as it folded so quickly.
It’s unclear if they got a good discount for prepayment –
Read the promo/offer of any 141 school. They get you a handy dandy loan and a class date and a contract that is as one sided as anything you’ll ever read. If you show up, excel, and graduate then it works. If something goes awry, you are in a bind for sure.
Our local school has a complaint against them from a student who did all the paperwork then had a family emergency and couldn’t start. He never took a single lesson. Flight school took all the funds directly from the loan company so they’d already been paid in full for ab initio through commercial I think it was. Maybe CFI. Anyway per the complaint they stopped taking the guys calls/letter/emails, refused to refund the money, and left him to deal with the loan company who of course wants their money. Not everyone is as bad as this particular character I’m sure but I wouldn’t send my enemies to a school under a pay up front in full program unless there are some more favorable terms.
But there sure are a lot of young adults out there with college debt dragging them down for their underwater basket weaving degrees or worse yet, 3 years of partying and no degree. Maybe I just don’t understand the modern way of financing an education.
Sorry, did it again and pushed the report comment.
Many Vietnam Veterans used the G.I. Bill to pay for flying and as the flight schools closed the Vets still had to pay back the G.I. Bill Loans. I can’t tell you how many of those guys I knew that wanted to strangle the ex-flight school owners. Sure, many of the flight schools returned the money but, many didn’t. It was a mess.
I was so broke I payed one flight at a time.
What’s this talk of GI Bill “loans”? I was chief instructor in a FAR141, VA approved flight school in the late 70s, and none of our students had VA “loans”. As I remember, the VA was billed and paid 80% and the student 20% of each lesson. (Or maybe it was 90/10; I wasn’t involved in the finances). Our local VA was very sympathetic to the challenges of running a small flight school, and was very free with counseling and guidance in negotiating the federal maze.
I ran a flight school in the 60’s and 70’s. 50% of the students were Nam vets. They paid for the school with their GI benefits, not a GI loan. It wasn’t a loan needing to be repaid by the GI, it was a benefit.
Where is Uncle Joe and his pay off debts plan?
It didn’t take long for someone to insert politics into this. Please provide a link to “Uncle Joe’s ‘Pay off debts plan’ so that we can all know what you’re talking about because nothing of the kind exists. If you’re talking about Student Loan Forgiveness, I’d recommend that you do a bit more reading on the subject.
His point is clear – the students will very likely want the government to bail them out for their poor financial decisions – because they’ve seen the Biden Administration do it repeatedly. Sucks for those who paid for their own (or their kid’s) education OR those who couldn’t or chose not to go to college – yet have their tax dollars used to buy votes for those who chose degrees that couldn’t produce sufficient income.
Here’s a key difference between liberals and conservatives—we liberals don’t want things to suck for others just because something sucked for us. Because we have compassion, we want things to be better for others than we had it. But you conservatives want things to suck for others because it sucked for you. You lack compassion and want others to be miserable like you were. Do you want things to be better for your kids and grandkids, or do you really want them to struggle the same way you did? Liberals, also known as progressives, want to make progress. We want things to get better. You’re regressive. You want to keep life needlessly hard.
I’m in college now, and I don’t get a penny in loan relief. Guess what. My position doesn’t change just because someone somewhere else gets some relief. I might have some envy, but overall, nothing changes for me. Nothing is better. Nothing is worse. So why shouldn’t relief be available for anyone at all?
He just paid down my one daughter’s R.N. nursing educational bill. More money for me to purchase fuel now for the Bonanza.
Said of course, faliciously, as Jerry’s response above, to Jethro B is spot on – regarding the Federal Student Loan Forgiveness Program.
And not as Jethro B commented.
Just can’t help yourself, can you. It must drive you crazy the way Biden lives, rent free, in your head.
When my daughter was learning, funded by me, refused to pay up front, it was pay as we go, because GA has a terrible reputation. When she visited home on a cross country I told the local refueler if you have trouble getting payment let me know and I’ll fix the bill with you. GA company went bust not a month or two later and had the administrators send me a bill of what was owing for my daughters flying. Paid the refueler and deducted the cost from that owing to the administrators, no questions were asked. Been in the aviation game a long time.
I should add the company was cashing the cheques of students who had paid the full tote cost of courses on the day they closed the doors. Integrity in business???
Please inform the rest of us about any companies you’ve ever heard of that kept customers’ checks sitting around in a drawer, uncashed, for any reason whatsoever. Every company on the face of God’s green earth deposits checks on the day that they are received. It appears that, if you’ve ever run a company, it likely failed, with lots of customer checks sitting on the desk waiting to be cashed. You seem to confuse integrity with rank ignorance of basic principles of finance.
The flight school I attended had this practice
A lot of small businesses don’t make daily bank runs.
If the school owners died in a plane crash in March, why or how did this become a news story on June 7th? Has it just been in the hopper since then, waiting for a slow news day? Even that doesn’t make sense, given the number of headlines on the main page at the moment.
Either because the aviation investigative journalism team assigned to monitor the Atlantis Aviation Flight Academy school on an ongoing basis in case anything newsworthy developed dropped the ball. Or, it took some time for an attorney to be appointed to oversee the estate, evaluate the financial position of the estate and its creditors, notify the effected students of their position, and then for the students to bring their story to the attention of the media.
Now that’s good sarcasm.
Recurring theme this story and just as common here in the UK. Although a tragic trigger to this event.
We have had 4 (previously) quite substantial schools go down in the last year here leaving students out of pocket for £/$ ,000’s. I am currently teaching a ‘refugee’ from one who lost £17000 – about $20000.
The problem appears to be that many schools are using tomorrow’s money to pay for today’s flying. So when tomorrow’s lesson comes along then no cash in the bank.
Seems a bit like a Ponzi scheme where tomorrow’s investors are paying today’s dividends.
Seems to me the way to go is an Escrow scheme where student’s funds are held in a different account and do not get sucked into paying today’s maintenance and fuel bills.
I believe the school I work at offers such a scheme. There is a small % uplift to cover the operating costs of Escrow – but seems like a worthwhile insurance premium to me
An escrow account should be required, for full tuition payments in advance, to be established for each student, for the express requirement to be used for training, administered, by trustees who are vetted, and approved by the FAA’s Legal Section. The student, and or sponsor would also required to be vetted too. A card would be issued to the student. The card would be presented by the student, to the school, at the end of each training event. School goes bust? No problem. Funds remain intact, without risk of loss, and off to another school. An annual form, similar to a tax return would be required to be filed, annually, detailing payments. Training facilities, being computerized, have where with all to ensure records are provided to the student and trustees. Co-certification the information, by both student and flight training facility. At least these fly by night, pardon the pun operations.
Well that just sucks. Every flight school I’ve taught at was pay as you go, although in my short time with American Flyers their mgr was trying to get students to put a few thousand on account and fly it off. This was back in 2001 after they stopped accepting credit cards as payment. They’ve long since left that location.
Go to ATP, overpay and get treated like crap. At least they will or might still be in business before you get your ratings.
This just happened at our airport as well. The owner died in a crash several weeks ago. Instead of closing the doors, the family is leaving the school open so all current students can complete their current courses and will shut down after after the last student. This solves that problem.
So, why aren’t the instructors and the family/estate trying something like this?
In the case of the school in the article, there are debts due in full upon death, which means that assets are frozen pending probate. There’s no money to pay instructors, for fuel, etc, as it’s all frozen. Your school’s position is clearly different. There is absolutely a co-owner still alive. If there wasn’t, there’d be probate happening.
“Samantha Fitzgerald, a lawyer representing the owner’s estate, told CBS Miami it is unlikely any refunds would be made due to the legal complexities involved.” The regular corruption justification of greedy lawyers. Nothing new.
amen!
Not necessarily a greedy lawyer thing—the courts order that secured debts be paid first, before even attorneys. Secured debts probably include the planes.
Brian says the owner of his local flight school just died in a crash and with both the owners of the Broward County AAFA school dying in a crash the fatslity odds are kind of shocking. I’m rethinking recommending aviation as a career suggesting students instead pursue Maritime professions as safer… assuming a lookout is posted for seaplanes on a collision course.
Sad story for both the family and the students/employees. I remember a helicopter school here in Southern California that went bankrupt overnight when the owners took all the money and went to Bermuda, closing the school. It left a lot of employees and students, and creditors in the lurch. The school helicopters were eventually sold out of bankruptcy (assets), but the paid-for lessons were not reimbursed. I suspect the owners are still enjoying the beach life…
It’s amazing as many as do can face the complexity & cost of training today. For the private rating, my flight school was a fellow GI who had just received his CFI before being transferred to the semi-remote Alaska location where we were assigned. Similarly, the “school infrastructure” was written material from the AOPA and an elderly C-150 owned by a young officer who had flown it up to be with him. A traveling FAA examiner from the Anchorage FSDO administered my check ride at no charge. Definitely low overhead & pay-as-you-go.
The fundamental problem, and lesson, here is: “Flight schools are not banks”.
For starters, their financial operations are not regulated or scrutinized nearly as strictly (read: at all). If you have the resources to qualify for a bank loan (steady income, home ownership, trust/college fund, banker’s child, etc.) even if it is co-signed, your money will be far safer than simply giving a flight school a “loan” upfront, yourself.
The only worse way of financing pilot training would be on the old “Christmas layaway plan”, where you pay for months until you’ve sent them enough money to cover the cost of your ticket.
Part of the problem here is the law and court systems. The retail customers should get paid back and in full first before any other payments are made to any creditors or equity parties in bankruptcy.
This will provide a little more incentive for the suppliers and investors to do their homework when providing companies with credit and protect consumer investment so that companies can sell and accept prepayments with more assurance to the customer.
You don’t get it—if a business investor was the LAST paid, they’d never invest. How likely would YOU be to invest a large chunk of money into a school or any other business if you were going to be the last to be repaid. You might think that prepaying at a flight school is the same as investing, but it’s not. You bought something of value for with you paid. A business investor didn’t buy something of value. The invested on the promise that they’ll get their money back in the end. If you had $10k to invest, would you give it to me if you knew you’d be the last to get your money back? Or would you expect it first?
I disagree, for several reasons.
A. Good luck with changing either the law or court systems. Or doing so in a manner that addresses this particular problem without creating a million other ones.
B. It’s hard enough to start, run, and keep financially healthy ANY small business, much less one with the capital investments required for a flight school. How many hair salons, ballet studios, bakeries, etc. have turned over in your local strip malls in the last year? Their overhead is a fraction of what a flight school requires.
C. Each one of those creditors and equity partners were able to demand priority reimbursement for their money because they had it to invest, and the flight school needed it. Altruism has never been a successful investment strategy. Their homework was far more thorough than any that a prospective student could do. No investment, no flight school.
D. The onus is (as always) on the retail customer. If the potential flight student is mesmerized by the spiel, bright baubles, and dreams, and then fails to “caveat emptor”, that not a problem in the law or court system.
I didn’t pay the whole thing ahead but my school did offer to sell “blocks of time” at a discount. I was getting my Light Sport certificate and another student bent the only plane they had to qualify for light sport. With no other light sport planes available for rent within 3 hour drive time, I just sat on the sidelines for several months waiting for it to be repaired. This happened twice during my training. With that and weather delays (Seattle area), it took me 4 years to fly about 50 hours to get my cert!
Dang.