Southern Air Holdings Inc., an air-cargo company that transported troops into Afghanistan, won court permission to exit bankruptcy under the control of a group of lenders lead by Canadian Imperial Bank of Commerce.
U.S. Bankruptcy Judge Christopher Sontchi approved the company’s reorganization plan today, less than six months after seeking court protection from creditors. Its former owner, Oak Hill Capital Partners LP, will retain 17.5 percent of the company and appoint one person to the new, five-member board, Southern Air attorney Brian Rosen, with Weil Gotshal & Manges LLP, said after the hearing.
“This plan was the product of a long and hard-fought negotiation,” Rosen told Sontchi today in federal court in Wilmington, Delaware. After unsecured creditors objected to the original plan filed last year, Oak Hill agreed to increase the amount of money it put back into Southern Air to boost recoveries.
The company filed bankruptcy in September, blaming cuts in U.S. defense spending and a drawdown of troops in Afghanistan. Southern Air provides aircraft, crew, maintenance and insurance services to airline customers, and transportation services to the U.S. military. The company was founded in Miami in 1947, according to court records. Oak Hill acquired the company, now based in Norwalk, Connecticut, in 2007.
The company will be controlled by the lender group, which will appoint three members to the board. The fifth board member will be appointed by the company chief executive officer.
The case is In re Southern Air Holdings Inc., 12-12690, U.S. Bankruptcy Court, District of Delaware (Wilmington).