Anyone have any idea how many CRJ's they have and where US Airways Express uses their capacity? It is all out of RDU? -Brian Judge warns bankrupt Midway Airlines may be liquidated The Associated Press August 30, 2003 2:47 pm RALEIGH, N.C. -- A federal bankruptcy judge is threatening to liquidate Midway Airlines because the carrier won't be able to emerge from bankruptcy on Oct. 29. U.S. Bankruptcy Judge A. Thomas Small on Thursday said he may convert Midway's Chapter 11 bankruptcy to a Chapter 7 liquidation on Sept. 24 unless the airline can quickly propose a reorganization plan showing how it can continue as a successful business operation. The changed status would force Midway, which filed for bankruptcy protection two years ago, to cease operation and sell all assets to pay creditors. "The judge wants a reorganization plan done, and if that's not going to happen in the near future, he's going to liquidate the company," Midway president and chief executive officer Robert Ferguson said. "If we don't, the gig's up." Once the busiest airline at Raleigh-Durham International Airport with 40 planes and 2,700 employees, Midway is trying to reinvent itself as a commuter feeder for US Airways. Midway officials told Small Thursday that negotiations with Dallas-based Beta Capital Group that had been under way since this spring had fallen through. In return for a $20 million investment to pay off creditors, Beta Capital wanted a stake in Midway's assets. Talks collapsed when US Airways, which now holds a claim to the assets, refused, Ferguson said. As part of its commuter feeder contract with Midway, US Airways had required Midway to emerge from bankruptcy by Oct. 31. To keep from being liquidated, Small said Midway must convince US Airways to extend the deadline and also must "propose a viable plan capable of expeditious confirmation." "We will continue to work with Midway as a partner and we will support their effort to emerge from Chapter 11," said US Airways spokesman David Castelveter. But the carrier also needs its pilot union to agree to amend its contract in order to get US Airways to extend the terms of a $12 million loan. If not, the loan will come due on Oct. 31 unless a reorganization plan has been confirmed, Ferguson said. "It's clear we can work out a deal with US Airways" to extend the deadline, Ferguson said. "Whether we can work out a deal with ALPA is another matter." ALPA, the Air Line Pilots Association, based in Washington, D.C., represents Midway's 85 pilots. US Airways wants the pilots to agree to extend the contract term from six to 10 years and to allow Midway to fly larger and smaller planes than the seven 50-seat Canadair regional jets now in the fleet. Union spokesman John Mazor said the union hadn't seen the proposal yet but had already agreed to significant concessions in 2001 and again in 2002. "With two significant concessionary downgrades, you have to ask how far you can go, but since we don't know what they want, we can't answer the question," Mazor said. Another problem for Midway is finding another investor willing to put up money the company needs to pay off administrative expenses that become due as soon as the carrier leaves bankruptcy. According to the latest report, Midway owes $9.6 million in administrative claims. Ferguson said US Airways has identified another potential investor, which he declined to identify. He said Midway could emerge from bankruptcy by year's end if everything goes well. Small could give Midway another extension at the Sept. 24 hearing but Thursday's order increases pressure for the company to emerge from bankruptcy soon, said S. Elizabeth Gibson, a professor and bankruptcy expert at the law school of the University of North Carolina at Chapel Hill. "The burden is on them to show why the airline shouldn't be converted," Gibson said. "He's saying 'I'm not going to let this drag on forever.'" _________________________________________________________________ Get MSN 8 and enjoy automatic e-mail virus protection. http://join.msn.com/?page=features/virus