Direct Air, doing business as Southern Sky Air Tours, Inc., filed for Chapter 11 bankruptcy protection Thursday.
According to paperwork filed with the U.S. Bankruptcy Court for the State of Massachusetts, the airline's board of managers said it was in the best interest of the company, its creditors, employees and other interested parties.
According to the bankruptcy filing, Direct Air has between 100-199 creditors, estimated assets of $500,000 to $1 million, and estimated liabilities of between $10 million and $50 million.
According to the United States Federal Court Website, the filing of Chapter 11 generally provides for reorganization, usually involving a corporation or partnership. The court says, "a chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time."
Below is the press release Direct Air sent out Friday afternoon:
Direct Air, based in Myrtle Beach, SC, filed for Chapter 11 bankruptcy protection yesterday in the U.S. Bankruptcy Court, Massachusetts Division.
A Washington, D.C- based investor group purchased a majority interest of Direct Air in September 2011. The operating management team of the previous owners was left in place by the new majority owners until earlier this week.
Despite the investment of additional working capital into Direct Air in the preceding months by the new majority owners, rising fuel costs and other operating expenses pushed the charter company into a severe operating loss position. As result of its financial difficulties, Direct Air was compelled to seek bankruptcy protection in an effort to reorganize the business.
Direct Air's previous operating management has been replaced. Direct Air is deeply apologetic for the inconvenience caused to its customers, the communities it serves, and its dedicated employees serving passenger needs everyday and
Direct Air hopes to emerge from bankruptcy as soon as possible.