The Boston Herald
Thursday, August 30, 2001

Conn. firm set to get Shuttle America
by Greg Gatlin

A Connecticut investment firm would buy regional airline Shuttle America
Inc. out of bankruptcy, and would keep the carrier flying out of Hanscom
Field under a reorganization plan filed in federal court in Hartford
yesterday.

Shuttle America said yesterday that the would-be acquirer is led by
high-flying airline investor Wexford Capital LLC of Greenwich, Conn. - the
same investor that just funded another bankrupt carrier, Midway Airlines
Corp., with $15 million. Wexford's investment assets exceed $900 million,
the airline said.

Bankrupt Shuttle America, whose flights out of Hanscom near historic sites
in Concord and Lexington have sparked ongoing protests, said in court papers
that the transaction is critical to its survival. The deal would bring it
two new commuter planes.

As of next week, the Windsor Locks, Conn. airline will be left with a single
aircraft, as the maker of its Dash-8 turbo-prop airliners takes back another
leased plane.

Without two new planes, it could not maintain operations and would be forced
to convert its Chapter 11 bankruptcy case to a Chapter 7 liquidation, the
airline said in court papers.

Under the proposed deal, the Wexford-led buyer, Shuttle Acquisition LLC,
would sublease two Dash-8 planes to Shuttle America for six months for
$120,000 a month.

The buyer would pay $1.4 million in cash up front, and post a $750,000 IOU.

It would assume $230,000 in airline payroll expenses, along with substantial
passenger ticket and contract liabilities, plus other costs.

The transaction is subject to court and creditor approvals, and a court
hearing is set for tomorrow in Hartford.

Shuttle spokesman Mark Cestari called the proposed deal a key step in
increasing the company's stability and expanding its service.


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