Hearing scheduled on bid to liquidate airline's assets; startup had flown out of Little Rock airport

It looks increasingly likely that GLO Airlines, the New Orleans startup, no longer will fly out of Bill and Hillary Clinton National Airport/Adams Field or any other airport anytime soon, if ever.

A hearing has been scheduled for Aug. 30 on a bankruptcy trustee's request to have the airline's assets liquidated.

In April, GLO sought protection under Chapter 11 of the bankruptcy code, seeking to reorganize its assets. But the acting trustee, Henry G. Hobbs Jr., filed a motion this month seeking to transfer GLO to Chapter 7 of the code, which is liquidation.

"On July 15, 2017, debtor ceased all flight operations," the motion said. "There is no longer a business to reorganize, and conversion of this case to Chapter 7 would be in the best interests of the creditors and the estate."

Hobbs left open the possibility that an independent trustee could be appointed under Chapter 11 to better manage the airline's financial affairs.

In both requests, he cited the airline's decision to continue to pay Trey Fayard, the airline's founder and chief executive officer, $7,500 in monthly salary without seeking permission from the bankruptcy judge.

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GLO suspended service to Clinton National and several other airports on July 15, ostensibly to find another company to fly and staff its fleet of three aircraft after the airline got into a dispute with its previous partner.

GLO offered direct flights between Louis Armstrong New Orleans International Airport and other locations in the region, including the Little Rock airport. It also offered seasonal flights between Little Rock and Fort Walton Beach/Destin, Fla.

A senior executive for the airline and an airline spokesman didn't immediately respond to emails Tuesday seeking comment on Hobbs' motion.

But officials with Clinton National said Tuesday that it would be difficult for the airline to operate again or to repay what it owes the airport.

"As we understand it, once you go into liquidation, that means that airline no longer exists," Ron Mathieu, the airport's executive director, told the Little Rock Municipal Airport Commission at its monthly meeting Tuesday. "It doesn't mean that name is not an asset that somebody else can use to fly."

An attorney for the airport, Steve Bingham, told the board that GLO "probably will go" into Chapter 7.

"None of it's final until it has been confirmed, but the likelihood of them coming back is pretty slim," he said.

Bingham also said it was unlikely that Clinton National will see the more than $63,000 that GLO owes the airport.

The airline had outstanding debts to the airport totaling $38,259.93 before it filed for bankruptcy protection. It accumulated $70,242.78 in debt after filing for bankruptcy. But the airport could apply a security deposit GLO was required to pay totaling $44,950.71, leaving a post-filing debt of $25,292.07, or $63,552 total when the pre-filing debt is included.

The loss of GLO service when it shut on July 15 didn't affect passenger traffic at Clinton National for the month, which rose 4.9 percent over the same month in 2016.

A total of 191,325 passengers went through the airport in July, or 7,691 more than the 183,634 that came through the airport in July a year ago.

GLO, meanwhile, saw 434 passengers last month, which was nearly 75 percent fewer than the 1,648 passengers it saw in July 2016.

Still, the commission chairman, Jim Dailey, expressed disappointment at the likely demise of the airline.

"I think it was a glowing day when they came here and they did a real service to us and fits that niche of some of those secondary markets we've been trying to reach," he said. "I think it was a sad day when they said they would discontinue service.

"I know it's a sad day for their team and their investors having to go through this process and this step. But I thank them for attempting, and I am sorry it didn't work."

Business on 08/16/2017

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