Sun, Sep 12, 2010
Move Will Allow The Airline To Exit Bankruptcy
Sun Country Airlines announced Friday the confirmation of its
plan of reorganization which allows the company to exit bankruptcy.
The plan was confirmed by Judge Robert J. Kressel during a court
hearing this morning in Minneapolis and was overwhelmingly approved
by the creditors eligible to vote. The plan provides for cash
payments to certain creditors, as well as a distribution of equity
in the reorganized company to other creditors.
“Today marks an important step in the company’s
emergence from bankruptcy,” said Stan Gadek, Sun Country
Airlines president and CEO. “I wish to thank both our
employees and our customers who continued to support the company
during this process. The plan’s confirmation highlights the
successful turnaround of Sun Country Airlines which will emerge as
a profitable and debt-free company.” Gadek went on to say,
“Going forward, Sun Country is well positioned for growth and
success as The Hometown Airline.”
As ANN reported last year, fortunes turned decidedly
against Sun Country in 2008, when parent company Petters Aviation,
LLC filed for Chapter 11 bankruptcy protection on October 6. The
capitulation came about two weeks after the offices of Petters
Group Worldwide were raided by federal agents. Company founder Tom
Petters resigned as chairman of Sun Country's board of directors
soon afterward, under clouds of accusation and a strong whiff of
corporate malfeasance.
Despite the turmoil, Gadek asserted his airline would continue
flying... though employees were asked to accept two rounds of pay
cuts through the end of the year, as the decline of Petters tanked
the airline's chances of securing outside loans to cover regular
payroll. At the time, Gadek promised those cuts would be
short-lived... and that apparently was the case. Sun Country
announced in April of 2009 a record first quarter net income of
$8.1 million. This compares to a net loss of $8.3 million in the
first quarter of 2008.
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