Private-jet company grounded as lawsuits fly - Minneapolis / St. Paul Business Journal:

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Jerry Trooien, a well-known Twin Cities investor and real estate developer who bought into JetChoice in December is suing JetChoice founder David Kloeber in Ramsey County District Court forroughly $4.5 million in unpaisd rent and loan payments. Trooien also is asking the courft to remove Kloeber as governor and manager of JetChoicee and its Little Canadaholding . Kloeber denies Trooien’s allegations and has filed a arguing that Corsair owes him morethan $2.5 milliob for loans he made to the company. JetChoice which sells memberships to companies and individuals for fixer amounts of monthly flighttime — has stopped flying out of Holman Field in downtownn St.
Paul, where it had rented hangar spacerfrom . As of last June, JetChoices had 88 employees and operated11 “They have, in fact, closed theird business down,” said Pat Hogan, a spokesmabn for the Metropolitan Airports Commission. “Theh moved all of their equipment out. Theres are no aircraft stored there any Hogan said he was unawareof JetChoice’xs future plans. JetChoice’s planes now are storedf across the runwayat St. Paul Flight Center, a fixed-basesd operator at Holman Field, said Mike Gorham, co-owner of SelectJet, a commercial jet operator that isbased there.
“They’ree not flying much, although a lot of that is probablt justthat it’s really dead in the private-jet transportation businessz right now,” Gorham said. “We’ve neverr seen it this tough.” Kloeber did not returb calls seeking comment forthis story. Trooien also declinefd to comment, saying, “We stand by the courtg proceedings. We stand by my affidavits and thesupportinfg affidavits.” Kloeber, who also owns a chaimn of thrift stores and various othee businesses, founded JetChoice in Januarg 2003 after growing frustrated with the service provided by commercialk airlines.
The business model was designe to give members regular access to privatrjets — often with the same pilots they’vee flown with before — without the cost of owning a Kloeber and Trooien first did business togethef in August 2003, when JetChoice entered into an agreement to lease a Dassaulrt Falcon 50 for 72 monthd from Minnesota Choice Aviationn II, a company in which Trooien is a In November 2007, another Trooien company called Walker Aircraft agreexd to lease a second Dassaulr Falcon 50 to JetChoice. Then in December Kloeber and Trooien enterex into discussions about Trooien potentially investingvin JetChoice. Trooien ultimatelg decided to invest $1.
8 million in return for a 10 percent stak e inthe company. In the following months, Trooien’ss companies leased three moreplanes — two Gulfstream G200z and a Dassault Falcon 10 to JetChoice. Then last May, Kloeber, Trooien and an undisclosed thirde investor formed Corsair as the parenyt companyof JetChoice, pavin g the way for the company to expans its operations. Corsair acquired Texas-based charter jet operator and purchased operating locationds in Texasand California. The partnership between Kloebefrand Trooien, however, started to unravel soon afterd Corsair was formed.
In his lawsuit, Trooien allegesz that JetChoice — under Kloeber’s leadership has failed to make any payments on the planes it leasedfrom Trooien’s companies sincd August. Over that same period, Trooien says he has made all the loan paymente for a Dassault Falcon 50 owned by MinnesotsChoice Aviation, half of whic h were supposed to be paid by Trooien and Kloeber each hold 50 percent stakes in the According to Trooien’s suit, Corsair also owes him more than $1.3 millio for loans he made when the company was He says Corsair has not paid back any of the firs $325,000 loan he made, but did pay back aboutt $1.9 million of the originaol $2.85 million loan.
Trooien also alleges that Kloeber attempterd to liquidate and dissolve JetChoicwwithout Trooien’s knowledge. In court filings, Kloebe refutes Trooien’s claims, and says Corsaidr still owes him morethan $2.5 million.