Bankrupt ERA Aviation selling Twin Otter Aircraft

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Just read this article off of landings.com

Chris


Bankrupt Era seeks to sell Otter aircraft

By Rob Stapleton
Alaska Journal of Commerce

As it continues to operate under bankruptcy protection, Era Aviation Inc. plans to sell all of its Twin Otter aircraft to purchase three other planes and to make a payment to its lender as part of its reorganization plan.

According to motions filed in the U.S. Bankruptcy Court in Anchorage on Sept. 11, Era Aviation is asking the court to allow it to sell three of its Twin Otter 100-200 series aircraft in exchange for $600,000 cash and $550,000 for credit toward a maintenance check on one of its DeHavilland Dash 8 aircraft. The $600,000 would be given to Era's lender, CapitalSource Finance LLC.

The motion filed by Era's attorney, Cabot Christianson, also included the sale of six of the airline's more valuable DeHavilland Twin Otter 300 series aircraft in exchange for three Beechcraft 1900D model aircraft.

According to the filing, the 100-series aircraft will be sold for $1.15 million to Avmax Group Inc. of Canada.

The sale of the remaining six Twin Otter 300-series aircraft at $1.4 million each will go to purchase Beechcraft 1900D aircraft at a price of $2.9 million apiece. The motion calls for CapitalSource to receive a security interest in each of the Beechcraft acquired and any proceeds that exceed the purchase price of the 1900D aircraft.

The motion also included the re-instatement of Era Aviation's 401K investment plan, and the continued use of cash collateral.

CapitalSource cut off Era's cash flow in December 2005, which triggered Era's reorganization under Chapter 11 of the U.S. Bankruptcy Code.

Also filing for Chapter 11 are Era's investors, who work under the name Era Aviation Investment Group LLC and includes former NFL football star Willie Gault as its managing partner. Actor John O'Hurley and Alan Hopkins are also listed in the investment group.

Era Aviation 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 when Alaska Airlines decided to hire its own employees from Western Alaska.

The Chapter 11 filing, which Landis called "just a hiccup," signaled some big changes in Era operations in the last nine months, including the dropping of service in Western Alaska, the sale of its fleet of Twin Otter aircraft and the re-fleeting with 19-seat Beechcraft turbo prop aircraft.

Bankruptcy Court Judge Donald MacDonald in a July 12 memo also issued a terse assessment of Era's failure to meet its own deadline to present a reorganization plan, or to provide the court with an audited financial statement.

Era delivered the financial statement on Sept. 1 and its reorganization plan to MacDonald on Sept. 11. The motion by Christianson filed on Sept. 11 also included a request for a hearing on Sept. 27 to approve the debtor's disclosure statement that was filed on Sept. 1.

Era Aviation, founded in 1948, has 340 employees and has operated passenger flights for the public for 22 years.