United Capital expanded Chalk's service to Key West, Florida, and Nassau and acquired additional aircraft, but struggled financially. In 1996, United Capital sold Chalk's to a group of investors, who operated the airline under the name Pan Am Air Bridge. In January 1998, Texas-based aircraft lease company Air Alaska purchased 70% of Pan Am Air Bridge, but following the collapse of Air Alaska, Pan Am Air Bridge filed for Chapter 11 bankruptcy protection only a year later on January 11, 1999. James Confalone, a businessman and former Eastern Airlines pilot, purchased Chalk's out of bankruptcy for $925,000 on August 2, 1999; it had been reduced to two aircraft and only 35 staff. Confalone bought five additional Grumman Mallard seaplanes and arranged a contract to buy 14 larger Grumman G-111 seaplanes to expand the operation. On December 17, 1999, the airline was relaunched as Chalk's Ocean Airways.