Aspen Executive Air asks court for advance on $5.7 million loan
November 13, 2007
WASHINGTON ” Aspen Executive Air LLC has asked a bankruptcy judge to order a group of lenders to give it a $200,000 emergency advance on a pending $5.7 million loan, saying it cannot operate its private airline business without the money.
The Aspen, Colo.-based company faces a Nov. 20 court hearing on whether the loan should be approved. In papers filed Monday with the U.S. Bankruptcy Court in Wilmington, Del., Aspen said its lenders have refused to advance funds since Nov. 7 and that it needs $200,000 just to run its operations until Nov. 20.
Aspen filed for bankruptcy on Sept. 14. It said it was only asking for cash sufficient to cover such imperative expenses such as insurance premiums, ground transportation services for its customers and flight operations costs such as jet fuel.
The airline said that “failure to obtain the emergency funding necessary to make such payments will result in the disruption or discontinuance” of its operations, will damage its business and “further erode” customer confidence.
The official committee representing Aspen’s unsecured creditors has backed the company’s request for an advance.
Aspen’s lenders include Calim Venture Partners II LLC and money manager John P. Calamos Sr. The lenders have already provided Aspen a $682,000 advance on its proposed bankruptcy loan to pay employee wages, among other expenses. But they said they would not grant additional advances without court approval.
Recommended Stories For You
Aspen is no stranger to cash crunches ” the company’s Chapter 11 filing was prompted by a lack of financing, an ongoing cash shortage and litigation over some of its plane leases.
Aspen hopes to exit bankruptcy by combining its fleet with the Arkansas-based Pinnacle Air LLC, both of which provide charter jets for wealthy executives. The bankruptcy court has yet to consider the deal, which is structured as a sale.