Ravn Air creditors committee objects to plan, seeks case conversion

By Sarah Lizee

Olympia, Wash., June 22 – Ravn Air Group, Inc.’s official committee of unsecured creditors objected to the company’s plan of liquidation and submitted a cross-motion to convert the cases to Chapter 7, according to an objection filed Monday with the U.S. Bankruptcy Court for the District of Delaware.

“Chapter 11 was not intended as a self-serving vehicle for secured lenders to divert value to themselves from the unsecured creditors in violation of the Bankruptcy Code’s priority scheme,” the committee said in its objection.

“This entire Chapter 11 case has been a Chapter 7 case in disguise, where secured lenders are using the DIP and now the plan process as a means to control the assets and recovery. This is contrary to how a Chapter 11 process should work.

“The debtors are supposed to be an adversary in a Chapter 11 case and in Chapter 7, the trustee may be selected with input from general unsecured creditors.

“The secured lenders have attempted to justify their use of Chapter 11 by offering to pay the administrative and priority claims. However, such claims are not significant (as compared to the unencumbered value of the estates) and are largely attributable to expenses of the debtors’ liquidation process – a Section 506(c) surcharge expense.

“The secured lenders are, in reality, only paying for control of this case.”

The plan hearing is set for June 25, as previously reported.

Ravn is an Anchorage-based airline company. The company filed bankruptcy on April 5 under Chapter 11 case number 20-10755.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.