Featured Book

TreatiseontheLaw

Global Aviation Can Pay $137,031 in Bonuses to 5 Employees

Thursday, 26 July 2012 07:29
Rate this item
(0 votes)
Chief Bankruptcy Judge Carla E. Craig gave Global Aviation Holdings, Inc., the green light to implement a key employee retention plan over the objections of the U.S. Trustee and the Official Committee of Unsecured Creditors.
 
The U.S. Trustee and the Committee argued the Debtors are improperly seeking to pay bonuses (i) to insiders without satisfying the requirements set forth in 11 U.S.C. Sec. 503(c)(1) or (ii) to the extent the KERP recipients are non-insiders, without establishing that the proposed bonus payments are "justified by the facts and circumstances of the case" as required by Sec. 503(c)(3).
 
An evidentiary hearing was held on July 11, 2012.  According to Judge Craig, the employees eligible to receive compensation under the KERP are not insiders of the Debtors, and the Debtors have established that the KERP is "justified by the facts and circumstances of the case."
 
Pursuant to the KERP, the Debtors intend to pay bonuses to five employees of its North American Airlines Inc. unit:
 
* Director of Safety: $18,050
* Vice President, Flight Operations: $50,696
* Chief Pilot: $29,355
* Senior Director of Maintenance: $15,750
* Director, Quality Assurance and Projects: $23,180
 
The total amount is $137,031.
 
The proposed bonus payments under the KERP are structured as a percentage of each KERP Employee's base salary and in accordance with the Debtors' pre-petition annual bonus plan.  The proposed payouts are intended to ensure that each of the KERP Employees remains with the Debtors through the relocation of North American's operations from JFK International Airport to Peachtree City, Georgia.  Each KERP Employee will receive the bonus upon the approval by the Federal Aviation Administration of the transfer of North American's operations to Georgia.
 
Global Aviation Holdings Inc., based in Peachtree City, Ga., is the parent company of North American Airlines and World Airways. Global is the largest commercial provider of charter air transportation for the U.S. military, and a major provider of worldwide commercial global passenger and cargo air transportation services.  North American Airlines, founded in 1989 and based in Jamaica, N.Y., operates passenger charter flights using B757-200ER and B767-300ER aircraft.  World Airways, founded in 1948 and based in Peachtree City, Ga., operates cargo and passenger charter flights using B747-400 and MD-11 aircraft.
 
Global Aviation, along with affiliates, filed Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012.
 
Global's lead counsel in connection with the restructuring is Kirkland & Ellis LLP and its financial advisor is Rothschild.  Kurtzman Carson Consultants LLC is the claims agent.
 
The Debtors disclosed $589.8 million in assets and $493.2 million in liabilities as of Dec. 31, 2011.  Liabilities include $146.5 million on 14% first-lien secured notes and $98.1 million on a second-lien term loan.  Wells Fargo Bank NA is agent for both.
 
Global said it will use Chapter 11 to shed 16 of 30 aircraft. In addition, Global said it will use Chapter 11 to negotiate new collective bargaining agreements with its unions and deal with liabilities on multi-employer pension plans.
 
On Feb. 13, 2012, the U.S. Trustee for Region 2 appointed a seven member official committee of unsecured creditors in the case.  The Committee tapped Lowenstein Sandler PC as its counsel, and Imperial Capital, LLC as its financial advisor.
Chief Bankruptcy Judge Carla E. Craig gave Global Aviation Holdings, Inc., the green light to implement a key employee retention plan over the objections of the U.S. Trustee and the Official Committee of Unsecured Creditors.

Please log in or register to view the entire article

Login to post comments

Featured News

  • Skypatrol LLC Case Summary & 20 Largest Unsecured Creditors

    Debtor: Skypatrol, LLC, a Delaware Limited Liability Company
                dba GPS Tracking Solutions
                dba M2M Depot
                dba Defender
                dba Total GPS Technologies
                dba Fleet Command
                dba Protek
                3055 N.W. 84th Avenue
                Miami, FL 33122-1921

    Business Description: Skypatrol, LLC provides integrated Global
    Positioning System (GPS) tracking solutions
    serving many markets including vehicle
    finance, fleet management, mobile asset
    tracking, automobile dealerships, outdoor
    sports and motor sports.

    Written on Friday, 15 December 2017 05:22 in Latest News Be the first to comment! Read 21 times Read more...