Global Aviation enters fourth extension of DIP forbearance agreement

By Kali Hays

New York, Sept. 19 – Global Aviation Holdings Inc. obtained a fourth extension of a limited forbearance stipulation with Cerberus Business Finance, LLC and North American Airlines Inc. allowing continued use of cash collateral through Sept. 23, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, North American Airlines is a debtor in the Global Aviation bankruptcy case and Cerberus is the administrative and collateral agent for the debtor-in-possession agreement.

After Global Aviation defaulted under the DIP agreement, Cerberus suspended all funding commitments and terminated cash collateral March 25.

Global Aviation had not been in compliance with its financing agreement because it claimed an unfavorable variance between the actual net cash flow and the budgeted amount for the period ended March 14 and a more that 10% unfavorable variance between actual cash receipts and the amount budgeted for the period ended March 14.

The stipulation was initially agreed to July 3 and does not allow the debtors use of cash collateral without the written consent of Cerberus and the default notice remains in full force and effect.

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

In exchange, Cerberus remits 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.

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, 2013. The Chapter 11 case number is 13-12945.

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