WASHINGTON -- Legend Airlines still is seeking funding to resume
operations, but concedes that liquidation under Chapter 7 of the
bankruptcy code remains a "possibility."
"We have discussed Chapter 7 as a option if we are unable to get
the funding that we need," said a Legend representative. "It is a
possibility but it is not imminent."
Legend shut down and filed to reorganize under Chapter 11
bankruptcy Dec. 3, eight months after it started flying.
A $20 million infusion of capital from an investment group
recently fell through, but the bankruptcy court is allowing the
carrier to meet with other potential investors.
"The creditors' committee has backed off a bit to give us some
breathing room so we can seek the additional funding," the Legend
representative said.
Initially, the carrier was seeking a "bridge loan" to keep it
going until it could secure the capital needed to remain in
operation. Now the carrier, which offered DC-9 service out of
Dallas' Love Field, simply is seeking capital.
Even if the carrier does secure the necessary funding to
reacquire its planes, it will still have another hurdle to
clear.
"The problem will be getting back all of our people," said the
representative. "The $20 million [loan] was under the assumption
that we were going to recall everybody, which we did in early
January."
When the funding failed to materialize, "we had to put them back
on inactive status," the representative explained. "Now we are at
the point were it will harder to recall all of the [291] employees
that we had.
"So, we will be in the position where we first started in
November 1999 and we had to go through a lot of hiring and a lot of
training and that costs money. Now we are not looking at a $20
million [loan]. We will need more than that."
Legend said it would continue to secure financial backing, but
could make a decision, perhaps within a week, as to whether it will
considering closing down for good.