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Dynamic's largest unsecured creditor pushes for liquidiation

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Dynamic's largest unsecured creditor pushes for liquidiation

Unread post by bimjim » Tue Nov 14, 2017

http://www.journalnow.com/business/high ... fb3dd.html

High Point airline's largest unsecured creditor pushes for liquidiation
Richard Craver Winston-Salem Journal
13 November, 2017

A High Point global charter airline with 132 employees could learn its financial fate Dec. 7.

That’s when a federal bankruptcy judge is scheduled to address a motion on liquidating Dynamic International Airways LLC, filed by its largest unsecured creditor.

The hearing is set for the Greensboro bankruptcy court of the U.S. Middle District of North Carolina.

On Friday, Air India Inc. became the second unsecured creditor to request liquidation of Dynamic. Air India claims it is owed $10.5 million from an arbitration award that Dynamic disputes.

Dynamic, which specializes in low-cost international service to the public, filed for Chapter 11 bankruptcy protection July 19.

Since declaring bankruptcy, Dynamic has eliminated at least 60 of 192 jobs.

In August, PMC Aviation LLC of Greensboro filed a Chapter 7 liquidation motion, claiming it is owed $1.19 million from an arbitration judgment reached in April that Dynamic disputes.

PMC claimed Dynamic "is suffering from millions of dollars of continuing losses... The debtor has been grossly mismanaged."

Air India said it has submitted its own Chapter 7 motion because PMC indicated Nov. 1 "it no longer desired to prosecute" its motion.

Dynamic lists between 200 and 999 creditors, assets between $10 million and $50 million, and liabilities between $50 million and $100 million. The company has projected funds will be available for distribution to unsecured creditors.

On Nov. 3, a bankruptcy judge approved Dynamic being eligible to receive an additional $2.5 million in funding from its debtor-in-possession lender. The lender already has provided Dynamic with $3.81 million in funding since the bankruptcy filing.

The lender also expressed a willingness to provide post-bankruptcy financing to Dynamic. The lender and Dynamic have reached an agreement on Dynamic’s short-term budget.

That arrangement did not satisfy Air India’s financial concerns about Dynamic.

"Even after the infusion of this additional $2.5 million, the debtor’s budget projects that the debtor will have less than $1 million in cash on hand on Dec. 30," Air India said.

The combined potential expenditures of more than $6.3 million "easily show... there has clearly been a substantial loss or continuing loss to the estate."

In a Sept. 19 filing, Dynamic reported it had a new chief executive in Ray Lawlor, who has more than 30 years of industry experience. He’s also senior vice president of cargo sales and marketing for Swift Air LLC. Dynamic reported at that time trimming its customer liability debt from $7.98 million to $1.96 million. It projected reducing the debt to $323,659 by mid-October.

At the time of the bankruptcy filing, Dynamic’s fleet featured six Boeing 767s serving routes that include New York and Ontario, Calif. International service is to Georgetown, Guyana; Guayaquil, Ecuador; Saipan in Northern Mariana Islands; and Changchun and Nanchang, China.

Dynamic said in an amended reorganization plan submitted Nov. 3 that its focus is now on an aircraft, crew, maintenance and insurance strategy with business from a third-party vendor that sells flight tickets.

An ACMI carrier receives a flat rate per flight hour. Dynamic said it has agreed to one ACMI contract with Swift Travel Services for flights between Port Au Prince, Haiti, and Santiago, Chile. It is negotiating for a second such contract,

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