Republic Airways Holdings filed with the U.S. Bankruptcy Court a motion, pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code and Bankruptcy Rule 6004, for approval of (i) the merger of Shuttle America into Republic Airline and (ii) surrender of the Shuttle America air carrier certificate.
The motion explains, “The need to consolidate the Debtors’ operations arises in large part from the national shortage of qualified pilots and acute national shortage of qualified regional airline pilots….Approval of the Motion will provide certainty to the Debtors and unlock important benefits that will begin accruing immediately upon completion of the Merger….Consolidation of the Debtors’ flying operations through the Merger under a single Republic Airline ACC will result in significant economic benefits and operational efficiencies for the Debtors that will begin to accrue immediately upon the Merger, and is essential to the Debtors’ ability to optimize their crew resources, which is crucial to their success following their emergence from chapter.”
The motion continues, “[T]he Motion is not asking the Court to ignore corporate separateness or formalities; rather the Debtors are seeking the Court’s approval of a merger under state law based on sound business reasons that will benefit both the Debtors, their respective estates, and all their respective creditors….Under the Court’s order approving the United settlement, Delta’s and United’s claims against Shuttle America and Republic Airline, aggregating $365.1 million, will be allocated between Shuttle America and Republic Airline such that the percentage recoveries to general unsecured creditors from the Shuttle America and Republic Airline estates will be equal or as nearly equal as possible….Thus, neither creditors of Republic Airline nor Shuttle America will be prejudiced by the Merger of the two entities as it will not affect their ultimate recoveries.”
The Court scheduled a November 28, 2016 hearing to consider the motion.
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