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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowCreditors of defunct ATA Airlines Inc. are expected to receive only a small fraction of what they’re owed under a liquidation plan that could be approved as early as March.
U.S. Bankruptcy Court Judge Basil Lorch this week approved ATA’s so-called disclosure statement, the document that creditors will rely on when deciding whether to vote for the plan.
ATA estimates unsecured creditors would recover about 1.3 percent of the $420 million they’re owed, while secured creditors could recoup about 13.9 percent of the $365 million they’re owed.
Actual recoveries could differ substantially. For example, those estimates do not factor in any recovery from ATA’s 6-month-old lawsuit against FedEx Corp., its former partner on a team providing charter flights for the U.S. military.
ATA alleges that FedEx reneged on an agreement to keep the Indianapolis airline on the team through September 2009. Memphis, Tenn.-based FedEx disagrees, saying it committed only to keeping ATA on board through September 2008.
ATA blames its financial unraveling on the loss of the charter business, which accounted for nearly half its revenue.
The company, a unit of Georgia-based Global Aero Logistics, filed for bankruptcy court protection and shut down last April, wiping out more than 2,200 jobs.
In recent months, ATA has been selling off remaining assets. Late last year, Dallas-based Southwest Airlines agreed to purchase ATA’s landing slots at New York’s LaGuardia Airport and most remaining assets for $7.5 million.
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