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Creditors of airline petition for involuntary Chapter 7

Everybody needs to be careful when taking on debts. This also applies to businesses in Texas or any other state that take on debt in order to pay for operating expenses and other necessary costs. If a company takes on too much debt without earning enough revenue to pay its bills, the company may find itself in serious financial problems. One airline company seems to have found itself in this situation and may be forced to file Chapter 7 bankruptcy even though the company does not wish to end its business.

Creditors of Evergreen International Airlines Inc. have recently petitioned the court to force the company into involuntary liquidation bankruptcy despite the airline's chief executive's intention to save the company. The summons filed by the creditors will require that the airline firm answer the petition, which had been filed with the court the day before. It is important that the company respond to the summons within the timeframe allowed in the applicable court rules.

Among the unsecured creditors filing the petition are two hotels that say they are owed over $440,000 for lodging the airline's crew members. Also, a plowing company -- another petitioner -- is asking for $25,000 it says the airline owes for clearing snow from cargo jets. At the moment, the airline is virtually shut down with its last flight occurring in early December. This is the first time in 30 years the airline has shut down its airline service.

The company's chief executive says that he is waiting for the cargo market to improve before restarting airline operations. However, he says that the company's trading division and the firm's museum are still performing well. On the other hand, when a company or an individual does complete a Chapter 7 bankruptcy, the unsecured debts may be completely discharged in Texas or in any other state. The business entity will cease to exist, allowing the business owners to move on to the next venture, while an individual would be free of unsecured debts.

Source: oregonlive.com, Creditors try to force Evergreen International Airlines into involuntary Chapter 7 bankruptcy, Richard Read, Dec. 19, 2013

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