President of Beleaguered Airline Files Chapter 7 Bankruptcy

Written by CFB Blogger. Posted in Blog

Ed Warnack, one of the founders and president of Direct Air, a low-cost, private airline, has filed for Chapter 7 bankruptcy. Warnack is claiming over $26 million of debts and only about $200,000 in assets. The airline abruptly ceased operations in March 2012. The Chapter 7 bankruptcy filing effectively stops the lawsuit recently filed by the bankruptcy trustee in Direct Air’s corporate bankruptcy case. According to a story appearing on StarNewsOnline, the bankruptcy trustee in this case is attempting to recover over $550,000 that the Myrtle Beach, South Carolina-based airline paid to Warnack. The trustee is also seeking to recover approximately $2.7 million the charter paid to the three other founders, as well as unspecified punitive damages. When Direct Air suspended operations, it left many passengers holding worthless tickets. According to the article, flights were often canceled within 30 minutes of scheduled departure times. This was due, in part, to unpaid fuel bills that left planes unable to takeoff. The budget-oriented airline was known for its low fares and flights to cities that didn’t have nonstop service to Myrtle Beach. Direct Air was often used by tourists flying to the Grand Strand on golf junkets. Your overwhelming debt is a serious matter that you need to deal with now. Filing for Chapter 7 or Chapter 13 personal bankruptcy is complicated. You need a knowledgeable and experienced bankruptcy attorney from Client First Bankruptcy at your side to guide you through every intricate step. Log onto www.clientfirstbankruptcy.com for important and up-to-date information on filing your personal bankruptcy or call us toll-free 800-383-6004 for your free initial consultation. We answer our phones Monday through Friday from 8:30 a.m. – 6:00 p.m. Central Time so you can get answers when you need them.