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Vanguard Airlines to file Chapter 11

Vanguard Airlines to file Chapter 11


KANSAS CITY, Missouri (CNN) -- Financially-troubled Vanguard Airlines has suspended operations and plans to file for bankruptcy, but doesn't expect to reopen for business again, according to a company statement.

"Vanguard Airlines has canceled all flights through Wednesday, July 31, 2002 and suspended all scheduled flights indefinitely," said a recording on the Vanguard reservation line early Tuesday.

"The company is seeking funds in order to resume operations. The company intends to file for protection under Chapter 11 of the Federal Bankruptcy Code."

Vanguard's Web site -- www.flyvanguard.com -- was not taking reservations early Tuesday.

"I'm sorry our booking server is temporarily down! Sorry for the inconvenience!" the Web page said.

Scott Dickson, Vanguard Chairman, CEO and President, issued a sobering statement to employees after the airline shut down:

"Dear Vanguard Family:

"Today is a sad day. At 1:00 a.m. (2:00 a.m. EDT) this morning, Vanguard Airlines suspended operations. This very difficult decision was made only after every effort was made to obtain the financing necessary to continue operations. We simply came up dry and ran out of time.

"It is likely that this is a permanent shutdown. With very limited exceptions, all Vanguard employees have their employment terminated as of 1 a.m. this morning.

"Although we will attempt to reorganize in bankruptcy and fly again, I cannot provide you any assurance of this."

Dickson partially blamed the post-September 11 business climate for the airline's demise.

Vanguard routes served 18 cities, including its Kansas City hub.

Vanguard customers with tickets can e-mail the airline at ch11@flyvanguard.com. Vanguard has made passenger re-accommodation arrangements with Frontier Airlines and National Airlines.

Under Chapter 11, a company is freed from creditors' lawsuits, while it reorganizes its finances. The debtor's reorganization plans must be accepted by a majority of its creditors.



 
 
 
 



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