- Published on Wednesday, July 04, 2012 00:00
- Written by By Alexie Villegas Zotomayor - Reporter
- Hits: 1546
TRAVELERS who bought tickets for the July 1 launch of Saipan Air will get their money back.Tan Holdings chief legal counsel Steven P. Pixley told Variety, “Of course, the passengers who purchased tickets will be reimbursed.”
Pixley, however, could not provide any numbers to Variety on the total number of tickets sold.
He said, “I do not have precise numbers at this time.”
He also said, “We are still determining our damages.”
On Friday, Tan Holdings announced that the airline would immediately cease operations.
Swift Air LLC, which was supposed to deliver two Boeing 757 aircraft to Saipan for the launch, failed to do so as it sought a Chapter 11 protection on June 27.
Saipan Air is listed as the second largest creditor with $1.276 million in claims among the top 20 creditors of Swift Air.
Given this roadblock to the operations, Saipan Air was forced to call off the launch on July 1.
Pixley, in a statement on Friday, said, “the economic reality of restarting operations following the postponement of the original launch date presents an insurmountable obstacle.”
Meanwhile, Swift Air LLC continues to proceed with its Chapter 11 petition.
In view of its bankruptcy petition, Swift Air also filed a motion seeking the court’s authorization for it to maintain existing bank accounts, company credit cards and the continued use of existing business forms.
In Swift Air’s estimate, as of petition date, the collective balance in its bank accounts are as follows: (a) operating account: $237,316.85; (b) tax account: $47.46; and (c) escrow account: $1,780,935.55.
Arizona U.S. Trustee Ilene J. Lashinsky on Tuesday filed a motion opposing Swift Air’s request.
Lashinsky said that although Debtor characterizes the request as one of maintaining bank accounts, it actually is a request to waive the requirements of 11 U.S.C. § 345.
She said that inasmuch as the trustees are fiduciaries for the creditors of the estate, they are required to provide protection for the assets of the estate.
The Federal Deposit Insurance Corporation will guarantee deposited amounts up to $250,000 with any amount exceeding the limit being subject to loss by the depositor, added Lashinsky.
She said, “Debtor should be required to deposit funds in excess of the FDIC limit in an authorized depository to ensure that the funds are collateralized and protected against loss.”
The U.S. Trustee designates the authorized depositories which depositories provide collateral, bonds or securities, to protect deposits exceeding the FDIC limit.
Such collateralization is monitored by the Federal Reserve System which furnishes quarterly reports to each United States Trustee region. If funds are deposited into an unauthorized depository, the Federal Reserve System is unable to monitor the corresponding deposit of securities and has no responsibility to do so.
On the request to continue using business forms, Lashinsky replied that there is no requirement that Debtors change business forms.
She, however, pointed out that it is the position of the United States Trustee that chapter 11 debtors indicate on their checks that they are debtors in possession.
On Swift Air’s request to continue using credit cards, the U.S. Trustee has no objection.
“The United States Trustee has no objection to the use of such cards as long as no amounts owing pre-petition to the card issuers is paid other than in accordance with a plan of reorganization or other Court order authorizing payment out of priority,” she said.
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