J3CubCapt
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This article is from the Raleigh NC news and Observer.
http://newsobserver.com/business/story/2456042p-284810c.html
Motion: Little hope for Midway
Filing advises forced liquidation
By CHRIS SERRES AND DUDLEY PRICE, Staff Writers
The administrator overseeing the bankruptcy of Midway Airlines is recommending the company be forced into involuntary liquidation.
Midway has been unable to come up with $5 million in new money to continue operations and "there is little likelihood of a successful reorganization," wrote J.M. Cook, a staff attorney for the bankruptcy administrator, in a motion filed Tuesday.
Cook asked the federal judge in charge of the case to convert Midway's bankruptcy from a Chapter 11 reorganization to Chapter 7 liquidation, a move that could shut down the airline and force the sale of its remaining assets. This is the second time in nine months that the bankruptcy administrator's office has filed such a motion.
"They made a valiant effort, but it's come to a point where we just don't think they can make it," Cook said in an interview. "At some point, the music has to stop."
Liquidation cannot occur without the approval of U.S. Bankruptcy Court Judge A. Thomas Small. A hearing on the motion has not been scheduled.
Robert Ferguson, Midway's president and chief executive officer, declined to comment on the motion and the airline's future. He said in February that Midway was talking to several potential investors.
Once the Triangle's busiest carrier, Midway is trying to reinvent itself as a small feeder carrier for US Airways. After a hiatus, Midway began flights again Jan. 1. Since July, Midway has been unsuccessfully searching for an outside investor that would inject an estimated $5 million into the company.
Midway needs the investment to reduce its debt, which has continued to accumulate while the company is in bankruptcy. According to Cook, Midway owes more than $10 million in administrative expenses. "They've got bills from six months ago that they haven't paid," Cook said.
Cook said the administrator's office no longer thinks Midway will find the needed investor. "It's been quite a long time, and they can't even point to a prospect," he said.
Last July, the administrator asked that the case be converted to Chapter 7 or dismissed because Midway wasn't submitting adequate monthly financial reports. But the motion was put on hold as Midway began filing more complete reports and also promised to submit a reorganization plan showing how the airline could be a viable business.
Midway filed the reorganization plan Feb. 21 but did not include specific information on how and when creditors would be repaid.
Staff writer Chris Serres can be reached at 836-4906 or [email protected].
http://newsobserver.com/business/story/2456042p-284810c.html
Motion: Little hope for Midway
Filing advises forced liquidation
By CHRIS SERRES AND DUDLEY PRICE, Staff Writers
The administrator overseeing the bankruptcy of Midway Airlines is recommending the company be forced into involuntary liquidation.
Midway has been unable to come up with $5 million in new money to continue operations and "there is little likelihood of a successful reorganization," wrote J.M. Cook, a staff attorney for the bankruptcy administrator, in a motion filed Tuesday.
Cook asked the federal judge in charge of the case to convert Midway's bankruptcy from a Chapter 11 reorganization to Chapter 7 liquidation, a move that could shut down the airline and force the sale of its remaining assets. This is the second time in nine months that the bankruptcy administrator's office has filed such a motion.
"They made a valiant effort, but it's come to a point where we just don't think they can make it," Cook said in an interview. "At some point, the music has to stop."
Liquidation cannot occur without the approval of U.S. Bankruptcy Court Judge A. Thomas Small. A hearing on the motion has not been scheduled.
Robert Ferguson, Midway's president and chief executive officer, declined to comment on the motion and the airline's future. He said in February that Midway was talking to several potential investors.
Once the Triangle's busiest carrier, Midway is trying to reinvent itself as a small feeder carrier for US Airways. After a hiatus, Midway began flights again Jan. 1. Since July, Midway has been unsuccessfully searching for an outside investor that would inject an estimated $5 million into the company.
Midway needs the investment to reduce its debt, which has continued to accumulate while the company is in bankruptcy. According to Cook, Midway owes more than $10 million in administrative expenses. "They've got bills from six months ago that they haven't paid," Cook said.
Cook said the administrator's office no longer thinks Midway will find the needed investor. "It's been quite a long time, and they can't even point to a prospect," he said.
Last July, the administrator asked that the case be converted to Chapter 7 or dismissed because Midway wasn't submitting adequate monthly financial reports. But the motion was put on hold as Midway began filing more complete reports and also promised to submit a reorganization plan showing how the airline could be a viable business.
Midway filed the reorganization plan Feb. 21 but did not include specific information on how and when creditors would be repaid.
Staff writer Chris Serres can be reached at 836-4906 or [email protected].
