The Official Committee of Unsecured Creditors appointed in the chapter 11 cases of Ravn Air Group, Inc. and its affiliated debtors submitted an objection to the Debtors’ motion for an order approving proposed Disclosure Statement.
The Committee claims that while the Disclosure Statement suffers from many deficiencies, above all it impermissibly solicits acceptances of a patently unconfirmable plan that does not meet the requirements of Section of the 1129(a)(1) the Bankruptcy Code.
The Committee asserts that the Debtors have not properly marketed the assets and little thought has been paid to whether the proposed sale process would benefit the Debtors’ estates as a whole as opposed to merely facilitating the secured creditors’ piecemeal liquidation.
The Committee further asserts that the Disclosure Statement also cannot establish that unsecured creditors’ recoveries under the Plan satisfy the “best interests” test and will not be less than in a chapter 7 liquidation. The Debtors do not and cannot provide a proper liquidation analysis because they are already proposing a process identical to a chapter 7 liquidation.
The Committee claims that the Disclosure Statement provides inadequate information about the nature and value of the Debtors’ potentially unencumbered assets and the proposed substantive consolidation of the Debtors’ estates — typically an unusual and extreme remedy — and why it is appropriate in these cases.
A copy of the Committee’s objection to the Disclosure Statement dated May 22, 2020, is available at https://tinyurl.com/yd4e2mgp from PacerMonitor at no charge.
Proposed Counsel to the Committee:
Christopher A. Ward
Shanti M. Katona
222 Delaware Avenue, Suite 1101
Wilmington, Delaware 19801
Telephone: (302) 252-0920
Facsimile: (302) 252-0921
– and –
BROWN RUDNICK LLP
Robert J. Stark
Oksana P. Lashko
Max D. Schlan
Seven Times Square
New York, New York 10036
Telephone: (212) 209-4800
Facsimile: (212) 209-4801
About Ravn Air Group
Ravn Air Group, Inc. was formed through the combination of five Alaskan air transportation businesses in 2009, creating the largest regional air carrier and network in the state. Ravn owns and, until the COVID-19-related disruptions, operated 72 aircraft at 21 hub airports and 73 facilities, serving 115 destinations in Alaska with up to 400 daily flights. Until the COVID-19-related disruptions, Ravn Air Group and its affiliates had over 1,300 employees (non-union), and it carried over 740,000 passengers on an annual basis.
Ravn Air Group provides air transportation and logistics services to the passenger, mail, charter, and freight markets in Alaska, pursuant to U.S. Department of Transportation approval as three separate certificated air carriers. Two of the carriers (RavnAir ALASKA and PenAir) operate under Federal Aviation Administration Part 121 certificates and the other (RavnAir CONNECT) operates under an FAA Part 135 certificate. In addition to carrying passengers, many of whom fly on Medicaid-subsidized tickets, other key customers include companies in the oil and gas industry, the seafood industry, the mining industry, and the travel and tourism industries.
Ravn Air Group and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-10755) on April 5, 2020. At the time of the filing, Debtors was estimated to have assets of between and $100 million to $500 million and liabilities of the same range.
Judge Brendan Linehan Shannon oversees the cases.
Debtors tapped Keller Benvenutti Kim LLP as bankruptcy counsel; Blank Rome LLP as special corporate and local bankruptcy counsel; Conway Mackenzie, LLC as financial advisor; and Stretto as claims and noticing agent.