April 4, 2008
ATA Bankruptcy Case
ATA filed a chapter 11 petition in Indianapolis on April 2, Case No. 08-03675. According to the first day motions, it lost $75 million in 2007 on $737 million in gross revenues. It has 29 aircraft, three of which are owned and the remainder leased. It has 2,200 employees. The immediate reason given for the bankruptcy filing is "due to ATA’s financial and operational predicament, ATA’s stockholders and the Secured Lenders will not provide additional capital or loans sufficient to maintain operations." That's not a shock considering that the the secured debt, according to the estimate of Steven Turoff, the turnaround expert, is about $350 million and the value of the collateral is about $50 million. The immediate problem arose when FedEx cancelled a contract with ATA so says ATA which "will result in the loss of substantially all of the Debtor’s AMC charter business."
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