Trustee Litigation Yields a 50% Creditor Dividend
100M
Annual Sales
0
No Secured Debt
Swift Air, Phoenix, AZ
Challenge
- Company had two Airline businesses- one profitable and one unprofitable
- Company sold the unprofitable business for $100 (i.e. nothing) to a group promising to find new financing, but financing never materialized
- Unprofitable business was insolvent at the date of sale and subsequently filed Chapter 11 within 90 days of sale
- After a contentious Chapter 11 process, Company was reorganized with new value financing
Solution
- MorrisAnderson became Liquidation/Litigation Trustee
- Primary task was to pursue the billionaire owner who had benefited from the sale of the unprofitable business to shield the assets of the profitable business from Creditors
Results
- After 8 years of litigation and appeals, Trustee prevailed with a large judgment against the billionaire owner
- Owner paid nearly $10 million to the Trust to satisfy the judgment
- Unsecured Creditors received a 50% recovery on their Claims
