=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2002/07/26/f= inancial0850EDT0036.DTL ---------------------------------------------------------------------- Friday, July 26, 2002 (AP) Administrator suggests liquidation for Midway (07-26) 06:50 PDT MORRISVILLE, N.C. (AP) -- Midway Airlines should be forced into involuntary liquidation because the twice-grounded carrier has failed to file financial information with the bankruptcy court, the administrator overseeing the airline's reorganization said. Marjorie Lynch, administrator for the U.S. Bankruptcy Court for the Eastern District of North Carolina, accused Midway of filing "incomplete, evolving and conflicting" financial data with the court. She filed a motion seeking court approval to convert Midway's bankruptcy from Chapter 11 reorganization to Chapter 7 liquidation, a move that would shut down the airline and force the sale of its remaining assets. "If this company can't comply with the rules of this court, then perhaps it should liquidate," Lynch said Thursday. Liquidation cannot occur without the approval of U.S. Bankruptcy Court Judge A. Thomas Small, who declined to comment on the motion. A hearing on the matter would take place after all creditors are notified, which could take up to 30 days. There is a high probability the dispute will be resolved before a hearin= g, a bankruptcy expert said. Often, court administrators threaten liquidation to scare companies into meeting the court's demands for information, said Kyung Lee, a bankruptcy lawyer with Houston firm Diamond, McCarthy, Taylor & Finley. "Threatening liquidation can seem heavy-handed, but it usually works," L= ee said. Robert Ferguson, chief executive officer and president of Midway, said t= he airline won't accept liquidation. "Clearly, we don't think it's in anyone's interests for us to go into Chapter 7, and we believe the judge will agree with us," he said. Midway has been struggling to stay aloft since it filed for Chapter 11 in August. Midway continued flying on a reduced schedule, but ceased operations after Sept. 11. It resumed flying Dec. 19 after receiving a $12.5 million grant from the federal airline bailout program. Last week, the company grounded its planes again and announced plans to resume flying by Oct. 1 under the logo of US Airways Express. US Airways spokesman David Castelveter said his company's deal with Midw= ay was predicated on the company restructuring under a Chapter 11 plan. He declined to comment further. =20 ---------------------------------------------------------------------- Copyright 2002 AP