Era still flying through bankruptcy process

Posted: Monday, October 16, 2006

The U.S. Bankruptcy Court has for the fourth time since January approved Era Aviation’s request for use of its cash collateral. In the meantime, the airline has heard nothing from its creditors about its re-organization plan, according to the airline’s attorney.

“There has been no contact with us by the creditors or their attorneys,” said Cabot Christianson, attorney for the Era group. “The silence is deafening. It has been six weeks since we submitted our plan, and no one has come forward.”

The cash collateral decision by the U.S. Bankruptcy Court was made on Sept. 27, after Era Aviation and Era Aviation Investment Group LLC filed a reorganization plan on Sept. 11. Era also filed its audited financials with the court on Sept. 1. The U.S. Bankruptcy Court approved the use of $126,462 in cash collateral at the Sept. 27 hearing.

The reorganization plan includes the payment of two of its major creditors, but Era Aviation and Era Aviation Investment Group LLC can’t pay its smaller creditors until they can meet with a quorum.

Era has agreed to pay CapitalSource Finance LLC a total of $12.4 million, in monthly installments of $127,752 until 2012, according to its reorganization plan.

The Chapter 11 filing came as a result of a dispute with CapitalSource over whether “certain technical financial benchmarks were met.”

Era Aviation Inc. and its investor company, Era Aviation Investment Group, filed for Chapter 11 reorganization in U.S. Bankruptcy Court in Anchorage Dec. 28.

Seacor Holdings, which is also listed as a disputed creditor in the court filings, formerly owned Era Aviation.

Era Aviation is currently leasing its offices and receiving ramp services from Era FBO LLC, which is owned by Seacor. Era FBO owns the facility at Era’s South Airpark location at Ted Stevens Anchorage International Airport. Million Air is now operating the fixed base operations formerly run by Era FBO.

According to the court records and the Era Aviation reorganization plan, the airline owes Seacor Holdings $3.8 million, and Era Helicopters and Era FBO a total of $2.86 million.

A claim on hold by Seacor against Era Aviation in King County, Wash., alleges that Era Aviation used money from the FBO, and money intended for Era Helicopters for its operations.

Era attorney Cabot Christianson said that Era’s accounting system was responsible for the error, and the money will be paid back as part of the bankruptcy.

Era Aviation recently discontinued its service in the Bethel area on July 28, and in August later lost the ground-handling contract of Alaska Airlines jets in Bethel.

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