US operator IAero Group has defended the proposed sale of assets – including much of the IAero Airways fleet – to an entity associated with Eastern Airlines, strongly rejecting objections from creditors.

IAero Group entered US Chapter 11 bankruptcy protection in September last year.

Court filings dated 4 April state that the company has been engaged in a marketing process to sell IAero Airways’ charter business for over five months.

Ninety-one potential strategic purchasers were contacted, and 35 of them emerged as interested parties, says the filing to the Southern District of Florida bankruptcy court.

But while this led to seven non-binding indications of interest, none submitted binding bids by the original December 2023 deadline, and only two were received after an extension – of which only the Eastern bid was viable. The proposed sale to Eastern includes nearly 30 Boeing 737s and other assets.

“The market has spoken,” the filing says. “No party can contend that the sale to Eastern is anything other than the best and highest, value-maximising disposition of the [IAero] assets and path forward.”

IAero-c-IAero Airways

Source: IAero Airways

Court filings state that, after five months of effort to sell the company, just one bid emerged

Unsecured creditors, through an official committee, as well as creditor Private Jet Services had lodged objections to the proposed sale.

The unsecured creditors’ committee had argued that the sale would solely benefit creditor Synovus Bank to the detriment of other stakeholders.

But the IAero court filing says the committee’s objection overlooks “significant benefits” that the sale process has conferred to “all stakeholders”, and adds that the committee members are “incorrectly” urging the court to reject the sale because it will not result in a dividend to them.

Private Jet Services, in a separate 28 March filing, discloses that it had “briefly engaged” in negotiations for a potential purchase of IAero, but says these negotiations “quickly unravelled”.

It claims there had been a plan to market the company for $216 million in cash, but that this was “doomed to failure” given that no interest was shown in such a purchase.

Private Jet Services’ filing is sharply-worded and contains several serious accusations – referring to “Machiavellian machinations” – but the IAero filing dismisses it as being “long on conspiracy theory and devoid of reasoned legal argument”.

“Notwithstanding such inflammatory and unsubstantiated allegations, [Private Jet Services’] objection, at its core, is a misdirected expression of disappointment and frustration with the proposed sale,” it adds.