Vanguard Airlines suspended operations July 30, 2002 at 1:00 a.m. They intend to file for federal protection under the Chapter 11 bankruptcy code.
Their
web page, which now only contains letters to
employees and
customers, states the “necessity” of their actions.
“Your
management team and I continue to believe that Vanguard held an excellent industry position and had demonstrated the viability of the business strategy. However, the general skepticism of investors towards airlines since September 11, coupled with Vanguard's history of losses, prevented us from obtaining significant new capital. In short, we were doing the right things but past history and timing vis-à-vis September 11th were against us.”
Vanguard stated on that the pay owed to the employees are now “prepetition wages.” These wages are not expected to be paid for a few months if not longer. Also, “Any Vanguard stock you hold (including stock purchased in the Employee Stock Purchase Plan) is almost certainly worthless and it is likely you will be entitled to claim a capital loss on such stock this year.”
According to the
United States Treasury Department, Vanguard Airlines was turned down by the Air Transport Stabilization Board (ATSB) for a guarantee of $15 million
financing on May 28, 2002. This may or may not have been enough aid for the
airline to recover, stating “The Board determined that Vanguard’s proposal did not provide a reasonable assurance that Vanguard will be able to repay the loan, one of the factors that the Board is required to consider under the OMB regulations.”
Personally I'd be hoppin' mad to wake up to a phone call at 1:00 am and be told that I am out of a job and won't be paid for quite some time.
I feel sorry for all those people who put all that hard work into their jobs and got railed like this.
Sources:
http://www.ustreas.gov/press/releases/po3133.htm
www.flyvanguard.com