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Global Aviation Second Bankruptcy Can Stay in Delaware

Global Aviation Holdings Inc., the biggest charter-flight company for U.S. military troops, can go ahead in Delaware with its second bankruptcy in less than two years, a judge in New York ruled.

U.S. Bankruptcy Judge Carla E. Craig in Brooklyn said today that the company’s Chapter 11 case, filed Nov. 12 in Wilmington, Delaware, can go forward and that a new judge can sort out the remaining issues from its prior case in Brooklyn.

Lingering claims in Brooklyn are “not something to justify disturbing the debtors’ choice of venue,” Craig said.

The company previously went into bankruptcy in February 2012, saying it needed to shed more than half of its aircraft and citing the end of flights to Iraq and Afghanistan.

After exiting court protection as a new company, it “continued to encounter various financial and operational hurdles, including decreased demand for military cargo and passenger services resulting from government budget constraints,” the company said.

It switched courts for the new case because its operations have moved south, said the company, parent of World Airways and North American Airlines.

“In light of the relocation of North American’s operations from Jamaica, New York, to Peachtree City, Georgia, in August 2012, the Global Aviation entities do not have a domicile, principal place of business, or principal assets” in Brooklyn, the company said in court papers.

U.S., Overseas

Its assets are in Georgia, Florida, Maryland and places overseas such as Germany, Belgium and Azerbaijan, the company said.

U.S. Bankruptcy Judge Mary Walrath in Delaware last week ended the initial hearing for the company’s second bankruptcy after a few minutes, saying lawyers needed to figure out if there’s a way to pursue the new case in Wilmington instead of returning to Brooklyn.

Global aviation’s most recent bankruptcy petition listed assets and liabilities of as much as $1 billion each. It seeks court permission to borrow as much as $51 million to keep operating in bankruptcy.

The company’s 14 percent notes due 2013 recently traded at 33.88 cents on the dollar, according to Bloomberg pricing data.

The new case is In re Global Aviation Holdings Inc. 13-bk-12945, U.S. Bankruptcy Court, District of Delaware (Wilmington). The old case is In re Global Aviation Holdings Inc., 12-bk-40783, U.S. Bankruptcy Court, Eastern District of New York (Brooklyn).

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