Unsecured creditors are objecting strongly to the proposed sale of US charter carrier IAero Airways’ assets, including nearly 30 aircraft, to an entity linked with Eastern Airlines.
IAero Airways and several associated companies entered US Chapter 11 protection in September last year.
Court filings in March revealed that IAero was pursuing an asset sale agreement with the entity, Eastern 737 Asset Holdings, and listed 29 Boeing 737s as part of the arrangement.
The purchase price includes assuming $71.2 million of liabilities to Synovus Bank.
Court hearings on the proposed sale are scheduled to take place on 8 April.
But a committee of unsecured creditors has expressed alarm at the impact of the sale, arguing that it is will solely benefit Synovus – the senior secured lender – to the “detriment” of IAero’s other stakeholders.
If the proposed sale is approved, says a 28 March court statement filed by the committee, it would leave behind a “woefully administrative insolvent estate” with “insufficient resources” to continue operations, pay vendors and suppliers, or confirm a Chapter 11 plan.
The statement makes the accusation that such a sale “abandons” creditors.
While the committee says it is prepared to support an asset sale – and even the current proposal – this is conditional on its providing “at least some meaning benefit” to constituents other than Synovus, claiming it will otherwise “strand” vendors owed at least $10 million.
FlightGlobal has sought comment from Synovus.
Specialist cargo industry publication FreightWaves reports that IAero Airways is making preparations to cease operations on 6 April, citing an internal memo from president Timothy Rainey.
