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Preece's troubles multiply: Bankruptcy judge rules in favor of creditors

Bruce Preece was fired on Friday from his position as Bemidji public safety director, reportedly because of differences in management style.

Detective Sgt. Jerry Johnson is serving as interim public safety director. Preece had been on paid administrative leave since April 25. He was placed on leave by former Bemidji City Manager David Minke.

Ron Eischens, city finance director is now serving as interim city manager. He said the city has not developed a plan for replacing Preece.

Meanwhile, in an unrelated action on Thursday, U.S. Bankruptcy Judge Nancy Dreher ruled in a consolidated trial that two companies demanding compensation from Preece could seek to collect a total of $556,414.

According to Preece's attorney, Richard Gabriel of Mendota Heights, Preece started Helicopter Flight Inc. in 1989 to provide professional helicopter flight training. Eventually, the company became a helicopter dealership with a staff of 31 pilots, mechanics and support staff.

In March 2001, Preece took the public safety director position in Bemidji and put the company up for sale. He accepted an offer in August 2001, but with the aviation industry crash after Sept. 11, the buyer withdrew the offer.

Preece continued to operate the business at a loss and was unable to refund some customers' investments. The business closed in 2003 and Preece filed for bankruptcy, taking the responsibility to pay back as much as possible through the sale of assets. Gabriel also said in a letter that Preece would pay "a sizable portion of his personal income toward these debts."

The attorney also said he asked Preece not to make any public statements until the settlement was complete.

The judge on Thursday ruled that Blue Skies Inc. and Central Boiler are excepted from Preece's Title 11 bankruptcy discharge. Dreher ordered that Blue Skies can recover $260,000 and Central Boiler can recover $296,414.

Preece has not returned calls. Eischens referred questions to attorney Julie Fleming-Wolfe, who also did not immediately return a call on Monday.