Haynes and Boone Advises Global Aviation Holdings in Chapter 11
Global Aviation Holdings, the largest commercial provider of charter air services to the U.S. military and a provider of worldwide commercial global passenger and cargo air transportation services, announced that the company and its subsidiaries, including its two operating airlines World Airways and North American Airlines, filed voluntary petitions for relief under Chapter 11. Haynes and Boones is acting as counsel.
In conjunction with its reorganization, the company has obtained debtor-in-possession (DIP) financing from its first lien lenders. On court approval, the new financing and cash generated from the company’s ongoing operations will be used to support the business during the reorganization process.
The company filed for Chapter 11 to strengthen its balance sheet and gain financial flexibility as it continues to realign its operations. It intends to continue to operate during the reorganization process.
As part of the reorganization, the company is taking steps to align its cost structure with market demand, and expects to reduce its workforce accordingly by approximately 16% of the employees over the next 90 days.
“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 John Graber, CEO. “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. We believe that this reorganization will enable us to reduce our debt and implement operational changes, while maintaining our commitment to safety, compliance and reliable customer service.”
Global Aviation Holdings Inc. is the parent company of North American Airlines and World Airways. North American Airlines, founded in 1989, operates passenger charter flights using B767-300ER aircrafts. World Airways, founded in 1948, operates cargo and passenger charter flights using B747-400 and MD-11 aircrafts.