MAXjet discontinues operations, to file Chapter 11 bankruptcy

By Caroline Salls

Pittsburgh, Dec. 24 - MAXjet Airways Inc. has discontinued its operations and the company's board of directors has voted to allow the company to file for Chapter 11 bankruptcy, according to a company news release.

The company has made some alternate flight and hotel plans for customers who were scheduled to fly between New York and London with MAXjet over the holidays.

In addition, MAXjet said it will ask for court approval of additional funding to provide flight and hotel accommodations for customers once it makes its bankruptcy filing.

According to the release, MAXjet's financial position has been negatively affected by fuel price inflation, other operating cost increases, competitive pressure and a decline in consumer spending.

In addition, the company said a substantial deterioration in financial market confidence has halted further fundraising efforts, leaving the board with no choice but to discontinue operations and recommend a bankruptcy filing.

All MAXjet flight operations have ceased, including all scheduled and charter flights to and from London Stansted Airport.

The board said in the release that filing for Chapter 11 protection will allow the company to liquidate its assets and resolve its claims.

MAXjet's current management is expected to remain in place to oversee the sale and/or liquidation of the business and to coordinate the analysis and resolution of claims.

The board said it does not expect there to be any value available for distribution to shareholders, so trading of the company's shares on the London Stock Exchange's Alternative Investment Market will remain suspended.

"Our efforts to raise additional capital have been unsuccessful. Our management team and directors vigorously explored alternative courses but sadly determined that a bankruptcy filing would best protect our customers and creditors," chief executive officer William Stockbridge said in the release.

MAXjet suspended trading of its stock on Dec. 7 as a result of an inability to clarify its financial position. At that time the company said it was in advanced discussions on a financing round for working capital and growth in 2008 that it expected to close before year-end.

However, the board has now determined that the proposed financing is unlikely to succeed in a timely manner.

MAXjet is an all business class airline based in Dulles, Va.

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