Missing Testimony: Security Aviation case stranger than fiction

ANCHORAGE, AK-The ongoing bankruptcy cases against Security Aviation and former owner Mark Avery have taken on some new quirks.

At an August 22 U.S. Bankruptcy Court hearing in Anchorage attorneys entered motions to consolidate the Security Aviation bankruptcy into Chapter 7 liquidation. Still there is no word on how the U.S. Bankruptcy Court will rule on this motion.

Additionally another twist in the case has one of three recordings of the initial meetings of the creditors, called a 341 hearing, missing, according to attorneys for Rob Kane and Paul Stockler.


The U.S. Trustee believes that Kane and Stockler together allegedly absconded with funds from Security Aviation. This claim has not been proven in court.


The testimony that is missing included testimony by Avery and by Kane.
A letter by attorney Ostrovsky says that the missing testimony by Avery is pertinent to the case.

Ostrovsky wrote Kay Hill, assistant U.S. Trustee the following in a letter:

“As it turned out, the trustee failed to have transcribed an hour and twenty minutes of the 341 meeting on those dates (June 2007). That time comprised Mr. Kane’s counsel questioning Mr. Avery and eliciting testimony favorable to Mr. Kane. The trustee used the partial transcript in support of a number of motions, never advising the Court or the parties that the transcript was incomplete (despite the notice which implies the contrary). The omission was only discovered when counsel for Mr. Kane began an in depth review of the transcript after counsel for the trustee claimed- based on the partial transcript- that Mr. Avery had testified very differently than counsel for Mr. Kane remembered. These matters are set out in Mr. Rader’s (attorney for Rob Kane) motion in the Security Aviation case at docket 95.”

Ostrovsky calls the omissions an extremely rare occurrence in his letter.

Cabot Christianson, an attorney for the trustees would not comment on the missing testimony and did not return messages or phone calls.

Federal Bureau of Investigations media contacts in San Francisco where the recordings were made denied having any knowledge of the incident, and referred calls about this to the Anchorage FBI office.

Eric Gonzales, media contact for the FBI in Alaska also stated that he no knowledge of the missing transcription or an investigation.

After repeated questioning, the Office of the U.S. Inspector about whether there was an ongoing investigation of this matter have turned up empty. To date they have not replied to numerous requests for information, and will not comment about it.

Kane who was a business affiliate of Security Aviation has claims against Avery and Security Aviation for $250,000 for services rendered in obtaining contracts for Security Aviation.

However trustee Barstow is not recognizing the claim. Attorneys refer to Kane as not a real creditor. The trustee seized property in 2006, in the form of diamonds and a motor home that Kane was given by Avery in lieu of payment.


After 90 minutes of court spattering by attorneys for the bankruptcy trustee, Gary Spraker asked the court to consolidate the bankruptcy into a Chapter 7 case, and asked for permission to obtain fees to file with the IRS.

U.S. Bankruptcy Judge Donald McDonald said that he would study the motions and issue a memo whether or not to allow the consolidation request. At this time McDonald’s memo has not been filed with the bankruptcy court.

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