Some $13 Million in Midway Assets Sold, Nearly Two Years After Liquidation Order
RALEIGH, N.C. (AP) -- About $13 million of Midway Airlines' assets have been sold, nearly two years after the airline was ordered liquidated, but the trustee said most of the remaining $140 million in creditors' claims won't be paid.
U.S. Bankruptcy Judge A. Thomas Small ordered Midway's assets liquidated in October 2003, after the airline gave up a 26-month struggle to reorganize.
Since then, Midway's eight regional jets, leases and parts have been sold for $12.9 million. Combined with funds on hand and other fees that were recovered, $20.59 million has been raised to repay creditors, a July 25 court report showed.
''We sold every tangible item we could find,'' said Joseph Callaway, a Rocky Mount attorney who was appointed to dispose of Midway's remaining assets.
More than $25 million in administrative claims remain outstanding and an estimated $115 million is still owed to more than 1,000 other creditors.
Bankruptcy rules say administrative claims are for services, products and work done after Midway filed for bankruptcy. They must be paid before other creditors can be paid.
About $8.5 million has not been disbursed, Callaway said, but that is not enough to pay all of the administrative claims or any of the other claims.
Callaway said he does not expect to the settle the Midway case until July 2006.
Midway filed for bankruptcy protection in August 2001. The airline continued flying until Sept. 12, 2001, the day after the terrorist attacks in the United States, and the company laid off 2,400 workers.
Copyright 2005 Associated Press