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Sunday, June 1, 2008

From the Field: California Lawyers Sue to Block Loan Collections Against Silver State Students

R&W Staff

A California law firm is suing a U.S. bank to block it from collecting payments on tuition loans to students of the failed training giant Silver State Helicopters.

The Feb. 3 collapse of North Las Vegas, Nev.-based Silver State left more than 2,500 aspiring helicopter pilots holding $70,000 loans taken to pay for training at the company’s more than 30 training locations throughout the United States.

Most had to pay the tuition up front but had not completed their training when Silver State shut its doors. The company’s assets are being liquidated in U.S. Bankruptcy Court. The students stand almost no chance of recovering their payments to the school through that process. They are classified under bankruptcy law as unsecured creditors, a group that stands nearly last in the line of people to be reimbursed through the liquidation.

Now a San Francisco law firm, Pinnacle Law Group, has filed suit against Cleveland-based KeyBank seeking to bar it from collecting on loans to Silver State’s California students who couldn’t complete their training because of the shutdown. The law firm is asking the state Superior Court in Oakland, Calif. declare the case a class-action suit covering all Silver State students.

A Salt Lake City law firm, Harward & Associates, has said it would file a class-action lawsuit against Silver State.

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