Former Pemco World Air files liquidation plan, disclosure statement

By Jim Witters

Wilmington, Del., Oct. 3 - WAS Services, Inc., formerly Pemco World Air Services, Inc., filed its Chapter 11 plan of liquidation and associated disclosure statement on Oct. 3 with the U.S. Bankruptcy Court for the District of Delaware.

The plan, in part, implements a settlement and compromise among WAS, Sun Aviation Services, LLC, the official committee of unsecured creditors and Avion Services Holdings, LLC.

Avion, an affiliate of Sun Capital Partners, Inc., bought substantially all of WAS' assets through a credit bid equal to the full amount of Pemco's debtor-in-possession and pre-bankruptcy obligations, as well as assumption of specified liabilities.

The settlement calls for

• The general unsecured creditors fund to be distributed to holders of allowed general unsecured claims after expenses are paid;

• The substantive consolidation of the debtors' estates;

• A waiver by the debtors' estates of avoidance actions, except for Avion causes of action; and

• The Sun Aviation note claims to receive no recovery under the plan.

Creditor treatment

Under the proposed plan of liquidation, treatment of creditors includes the following:

• Holders of allowed Avion secured claims will credit bid those claims at auction and are not entitled to a distribution;

• Holders of other allowed secured claims will receive their collateral or payment in full in cash;

• Holders of allowed other priority claims will be paid in full, either on the plan effective date or as the payments come due;

• Holders of allowed general unsecured claims will receive a share of the general unsecured claims fund, with an estimated recovery of 1% to 3%;

• Intercompany claims and equity interests will be canceled; and

• Holders of Sun Aviation note claims are not expected to receive any payment or distribution.

No hearing has been scheduled for consideration of the disclosure statement.

Tampa, Fla.-based Pemco performs large jet maintenance and repair services. It filed for bankruptcy on March 6, 2012 under Chapter 11 case number 12-10799.

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