Case No. 00-19258-LBRUnited States Bankruptcy Court, D. Nevada
March 15, 2001
Laurence M. Frazen, Esq., BRYAN CAVE LLP, Kansas City, MO, Special Counsel for National Airlines, Inc.
James Shea, Esq., SHEA CARLYON, LTD., Las Vegas, NV, Local Counsel for National Airlines, Inc.
ORDER PURSUANT TO 11 U.S.C. § 105 AND 363 APPROVING AND AUTHORIZING DEBTOR’S ENTRY INTO AIRCRAFT LEASE AGREEMENT
LINDA B. RIEGLE, United States Bankruptcy Judge
The Court has considered the “Amended Emergency Motion For An OrderPursuant To 11 U.S.C. § 105 And 363 Approving And AuthorizingDebtor’s Entry Into Aircraft Lease Agreement” (the “Motion”) filed by NATIONAL AIRLINES, INC. (“National” or “Debtor”) Debtor-In-Possession in the above-captioned case, the supporting Memorandum of Points and Authorities and the entire record now before the Court, and after due deliberation and sufficient cause appearing therefore, the Court approves the Motion as follows:
THE COURT FINDS AND CONCLUDES AS FOLLOWS:
19. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. § 157 and 1334. Venue is proper pursuant to 28 U.S.C. § 1408 and 1409. This Motion is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). The statutory predicate for the relief requested herein are Sections 105 and 363 of the Bankruptcy Code.
20. Notice of Motion has been given to the U.S. Trustee, the Committee and all parties on the Official Service List. Such notice is adequate under the circumstances.
21. As part of its ongoing effort to continue to service its existing flight schedules and passengers booked on its new scheduled non-stop service to Chicago, O’Hare Airport and a third daily frequency to Philadelphia (the “New Routes”), the Debtor has determined, in the exercise of its business judgment, that it must lease an additional aircraft.
22. The Debtor has negotiated an Aircraft Lease Agreement (the “Lease”) with First Security Bank, National Association as Owner Trustee and for the benefit of Sunrock Aircraft Corporation (collectively, “Lessor”) pursuant to which Debtor will lease a Boeing 757-200 with a tail number of N542NA (as further described in the Lease, the “Aircraft”).
23. It is in the best interest of the estate and creditors to allow the Debtor to Lease the Aircraft to service the passengers booked on the New Routes.
24. Debtor’s inability to service passengers booked on the New Routes will cause financial harm and shake customer confidence. It is critical that the Debtor honor its passenger bookings and flight schedules.
25. The Debtor believes that the Lease of the Aircraft from the Lessor upon the terms and conditions set forth in the Motion and the Lease reflects a market-competitive transaction.
26. The costs associated with the Lease are more than justified by the benefits that are expected to be realized by enabling the Debtor to service its markets and maintain its flight schedules. The terms of the Lease were negotiated in good faith and represent competitive terms for agreements of this nature.
27. In sum, the Debtor has determined in the exercise of its business judgment that entering into the Lease Agreement will improve operations and enable the Debtor to continue to service its markets. Accordingly, the granting of the relief requested in the Motion is in the best interests of its estates, its creditors and other interested parties.
28. The Lessor has not waived any claims arising from its prepetition transaction with Debtor concerning the Aircraft by virtue of the Lease.
29. The Debtor is granted relief from the automatic stay of 11 U.S.C § 362 to exercise its rights pursuant to the terms of the Lease to repossess the Aircraft and pursue its other remedies upon termination of the Lease.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
A. The Motion is approved;
B. The Lease is approved and the Debtor is authorized to perform thereunder.