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Court OKs MAXjet customer accommodation funding of $390,000
By Rebecca Melvin
New York, Jan. 11 - MAXjet Airways Inc. received court approval for customer accommodation funding of $390,000 associated with the airline's sudden shutdown in December, according to a filing Friday with the U.S. Bankruptcy Court for the District of Delaware.
Judge Peter J. Walsh issued a final order for the funds to provide alternative flight and hotel accommodations for at least 500 passengers that were stranded at the end of December and about 800 more that had a return flight scheduled between Jan. 1 and Jan. 17.
In its motion, MAXjet said its financial position had been negatively affected by fuel price inflation, other operating cost increases, competitive pressure and a decline in consumer spending.
In addition, the company experienced a substantial deterioration in financial market confidence and had halted further fundraising efforts, leaving the board with no choice but to discontinue operations and recommend a bankruptcy filing to liquidate its assets and resolve its claims, according to the motion.
The company has between $10 million and $50 million in assets and between $50 million and $100 million in debt. Its largest unsecured creditor is Israeli Aircraft, Tel Aviv, Israel, with a $2.28 million trade claim.
In addition, a class of about 300 of MAXjet's former employees is suing the company for back pay and benefits in connection with an alleged violation of a federal law requiring companies to give employees 60 days of notice in advance of termination. The employees were terminated in a mass layoff on Dec. 24.
MAXjet is an all-business-class airline based in Dulles, Va.
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