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Global Aviation Holdings Files Fourth Bankruptcy Case
Author: Joel R. Glucksman
Date: November 26, 2013
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Global Aviation Holdings may have made history after announcing on Nov. 12 its plans to file for protection under Chapter 11 of the bankruptcy law for the fourth time since its inception.
The company, which is the largest commercial provider of charter air services to the U.S. military, filed bankruptcy proceedings with the U.S. Bankruptcy Court in Wilmington, Del., and cited government spending cutbacks as the most recent cause of its financial insolvency. In paperwork filed with court, Global Aviation listed both assets and liabilities of as much as $1 billion, according to Bloomberg.
The firm and its subsidiaries – two of which are World Airways and North American Airlines – said that bankruptcy protection would enable them to strengthen their balance sheets and secure a measure of financial flexibility while Global reorganizes.
“We intend to use the reorganization process to help implement our plan to lower costs, stabilize our businesses, grow revenue and diversify our product lines,” said CEO John Graber. “We have taken a number of steps to improve our operations over the past few months and we were making great progress; however, the continued worldwide downturn in commercial freight markets coupled with the military’s decision to immediately curtail its cargo expansion flying has made it necessary for us to undertake this court-supervised reorganization.”
The company has already secured debtor-in-possession financing from its first lien holders, and said it plans to maintain its operations during the reorganization process. Global Aviation Holdings also petitioned the court for permission to continue paying wages and health benefits to employees during the bankruptcy process. However, the company may be forced to slash its workforce by as much as 16 percent, Bloomberg noted.
The firm sought bankruptcy protection for the first time in 2004, then again in 2006 and in 2012, in the Eastern District of New York, according to Reuters.
- Practices: Bankruptcy & Creditors' Rights
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Global Aviation Holdings Files Fourth Bankruptcy Case
Author: Joel R. Glucksman
Global Aviation Holdings may have made history after announcing on Nov. 12 its plans to file for protection under Chapter 11 of the bankruptcy law for the fourth time since its inception.
The company, which is the largest commercial provider of charter air services to the U.S. military, filed bankruptcy proceedings with the U.S. Bankruptcy Court in Wilmington, Del., and cited government spending cutbacks as the most recent cause of its financial insolvency. In paperwork filed with court, Global Aviation listed both assets and liabilities of as much as $1 billion, according to Bloomberg.
The firm and its subsidiaries – two of which are World Airways and North American Airlines – said that bankruptcy protection would enable them to strengthen their balance sheets and secure a measure of financial flexibility while Global reorganizes.
“We intend to use the reorganization process to help implement our plan to lower costs, stabilize our businesses, grow revenue and diversify our product lines,” said CEO John Graber. “We have taken a number of steps to improve our operations over the past few months and we were making great progress; however, the continued worldwide downturn in commercial freight markets coupled with the military’s decision to immediately curtail its cargo expansion flying has made it necessary for us to undertake this court-supervised reorganization.”
The company has already secured debtor-in-possession financing from its first lien holders, and said it plans to maintain its operations during the reorganization process. Global Aviation Holdings also petitioned the court for permission to continue paying wages and health benefits to employees during the bankruptcy process. However, the company may be forced to slash its workforce by as much as 16 percent, Bloomberg noted.
The firm sought bankruptcy protection for the first time in 2004, then again in 2006 and in 2012, in the Eastern District of New York, according to Reuters.