Global Aviation reaches deal for interim loan forbearance, cash use

By Caroline Salls

Pittsburgh, March 31 - Global Aviation Holdings Inc. entered into a stipulation with Cerberus Business Finance, LLC and North American Airlines, Inc. regarding a limited forbearance under Global Aviation's debtor-in-possession financing agreement and consent to use cash collateral, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

North American Airlines is a debtor in the Global Aviation bankruptcy case, and Cerberus is the administrative and collateral agent for the DIP agreement.

The company said it is not incompliance with the financing agreement because of an unfavorable variance between the actual net cash flow and the budgeted amount for the period ended March 14 and a more than 10% unfavorable variance between actual cash receipts and the amount budgeted for the period ended March 14.

As a result, the Global Aviation debtors are in default under the DIP agreement, and Cerberus suspended all funding commitments and terminated the use of cash collateral on March 25.

According to the stipulation, North American will transfer to Cerberus a $1.05 million payment made by Aecom National Security Programs Inc. under a contract between the parties.

In exchange, Cerberus will remit back to North American the funds it sweeps from the airline's bank accounts that constitute payments in advance from Aecom and any additional payments made by Aecom under the contract for invoices issued on or after March 29.

Those payments can be used to pay vendors and any other costs associated with the Aecom contract.

Also under the stipulation, the debtors cannot use cash collateral without the written consent of Cerberus, and the default notice remains in full force and effect.

Global Aviation, a Peachtree City, Ga.-based provider of charter air transportation for the U.S. military and of commercial global passenger and cargo air transportation services, filed for bankruptcy on Nov. 12. The Chapter 11 case number is 13-12945.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.