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Date set for Kiwi asset sale
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June 19, 1997: 3:54 p.m. ET
No changes seen in staff or schedules if major creditor takes over carrier
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Dateline (CNNfn) - A U.S. bankruptcy judge set a hearing for July 10 for companies to submit bids to buy the assets of cash-strapped Kiwi International Air Lines.
The carrier, which filed for Chapter 11 bankruptcy reorganization in September 1996, is considering a $16 million offer from Kiwi International Holdings Corp., spokesman Rob Kulat said.
Kulat said the airline is happy with the offer, which includes a guarantee of no changes in scheduling or personnel.
"This is good for the company," Kulat said. "It provides for future funding and it gets us out of bankruptcy sooner than we anticipated. It will be a seamless transition."
Judge Rosemary Gambardella on June 17 decided to allow other companies to bid on Kiwi's assets before accepting the offer from Kiwi Holdings, Kulat said.
Kiwi Holdings was formed by Charles Edwards of Wasatch Enterprises LLc. Wasatch has loaned the airline $10.2 million since November 1996.
Kulat said he doubts there will be other offers, because a company would have to repay the $10.2 million secured loan.
"For anyone to outbid Kiwi Holding, they'd have to pay the loan plus put additional money in," Kulat said.
Kiwi, based in Newark, N.J., was founded by former employees of now-defunct Eastern and Pan Am airlines. Kiwi was grounded for three months last year amid questions about pilot training and safety, but the carrier contends it has a perfect flying record.
Bookings also dropped dramatically after the crash of a ValuJet airplane in the Florida Everglades in May 1996 because of the public's perception that low-cost airlines were unsafe.
- Martine Costello
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