Vanguard grounds all flights

 
Old Jul 30, 02, 12:28 am
  #1  
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Vanguard grounds all flights

Thought something was up when I pulled up the website earlier tonight and saw a link to Frontier... Now it's official - from www.flyvanguard.com

Vanguard Airlines has cancelled all flights through Wednesday July 31, 2002, and suspended all scheduled flights indefinitely. Vanguard Airlines intends to file for protection under Chapter 11 under the federal bankruptcy code. Customers may email any inquiries to [email protected] Vanguard Airlines has made passenger re-accommodation arrangements on the following airlines: Frontier Airlines will waive certain advance purchase requirement and other restrictions for passengers holding valid Vanguard tickets. Proof of Vanguard Airlines purchase is required, such as a paper ticket or a print out of an e-ticket confirmation. Call 1-800432-1359 for more details and reservations. Printed confirmation and/or paper tickets must be presented at the airport ticket counter at the time of travel. National Airlines has a special discounted fare and waive certain advance purchase requirements for passengers holding valid Vanguard tickets. Proof of Vanguard Airlines purchase is required, such as a paper ticket or a print out of an e-ticket confirmation. Call 1-888-757-5387 for more detail and reservations. Printed confirmation and/or paper tickets must be presented at the airport ticket counter at the time of travel. We will update information on other airlines re-accommodation agreements as it becomes available. Thank you for your support of Vanguard Airlines through the years. Information for Vanguard Employees Scott Dickson Chairman, CEO and President July 30, 2002 Dear Vanguard Family: Today is a sad day. At 1:00 a.m. this morning, Vanguard Airlines suspended operations. Absent receipt of critical funding, we intend to soon file for Chapter 11 protection in the federal bankruptcy court for the western district of Missouri. This very difficult decision was made only after every effort was made to obtain the financing necessary to continue operations. We simply came up dry and ran out of time. The reasons for the cessation of operations and need to file are more particularly set forth in our press release. It is likely that this is a permanent shutdown. With very limited exceptions, all Vanguard employees have their employment terminated as of 1 a.m. this morning. No bumping rights exist. A limited group of employees who are being contacted individually will have their employment continued for a brief period of time as we seek to obtain financing. Such employees are hired only on a day-to-day basis and may be terminated on notice. The possibility of shutdown has been communicated, and known, for a long time. We were unable to provide specific notice of the actual shutdown earlier, because we have had hope of obtaining financing, and have held discussions with potential lenders, until the very last minute. Any notice provided prior to today would have removed any chance of obtaining financing. Several times in the last year we have been on the verge of shutdown and obtained financing at the last possible moment. This situation was no different, and it was definitely worth our while to try to obtain financing until the last possible moment. Employees are required to return any airport-issued badges and keys and are requested to return this Thursday or Friday to retrieve their personal belongings. Except in the case of emergency need, you will not be allowed admittance to Vanguard facilities today (Tuesday, July 30th). I regret this inconvenience but the fundamental purpose of Chapter 11 is to provide an orderly process and today all our efforts must be focused on obtaining additional capital to allow the Company to recommence operations. If you have an immediate emergency need for a personal item, please advise a security guard and we may be able to retrieve it for you. Your management team and I continue to believe that Vanguard held an excellent industry position and had demonstrated the viability of the business strategy. However, the general skepticism of investors towards airlines since September 11, coupled with Vanguard's history of losses, prevented us from obtaining significant new capital. In short, we were doing the right things but past history and timing, vis--vis September 11th, were against us. Although we will attempt to reorganize in bankruptcy and fly again, I cannot provide you any assurance of this. I am certain you will be able to follow the course of our reorganization efforts in the Kansas City newspapers. Employee inquiries should be sent by email to [email protected] You may also contact the Company's General Counsel, Bob Rowen, by phone at 816-243-2995. However, please understand that the Bankruptcy Court will allow the hiring of only a tiny staff to handle the liquidation and that staff will be extremely busy. The staff may have a limited ability to return emails and may not have time to handle phone inquiries. If you believe Vanguard may not have your current address on file, please leave your current address and contact information with Human Resources, by hand delivery, letter and/or email to [email protected] During the last year, you worked extremely hard to make Vanguard a success. Our passengers demonstrated their confidence in the airline by purchasing tickets for future transportation. Our shareholders provided as much financial support as they were able given economic conditions over the last 10 months. Many of our suppliers also provided substantial financial concessions, while their payables increased. The shutdown of Vanguard is a tragedy for many. I am deeply sorry that it had to happen. You have a lot about which to be proud. Despite substantial adversity, we operated a safe airline for over seven years. We brought affordable transportation to Kansas City and the Midwest. You showed tremendous spirit, hard work and determination. A list of FAQs is being provided separately. I appreciate the personal friendships I enjoyed with many of you during the last year. I wish you the best in your future career. You will be in our prayers. Very truly yours, Scott Dickson Vanguard Airlines Chapter 11 Filing Frequently Asked Questions Why did it happen? Vanguard Airlines has been in financial distress for at least three years. During this period, many payables increased. During 2000, Vanguard management adopted a revised business strategy and this strategy was implemented during 2001. Although the strategy showed immediate signs of success, the events of September 11 interrupted our business improvement and our efforts to obtain additional financing. Since September 11, we have been battling time. The general weakness in the industry resulted in our operations continuing to be a financial drain. Our debts to creditors mounted and time ran out. More information is contained in our press release. When will I get my earned pay? Wages and salaries owed you as of today are "prepetition wages" and likely will not be paid for a matter of months, if not longer. Employee wages (including vacation) earned in the last 90 days are a priority claim (up to $4,650 per employee) and thus, absent unusual circumstances, will be paid before any amount is paid to the Company's general unsecured creditors. The Company will schedule the amount you are owed and, as long as you agree with this schedule, you will not have to file a claim for wages. When will I get my expenses reimbursed? These are also prepetition claims entitled to priority subject to the aggregate limit of $4,650. You will likely want to file a claim in the Company's bankruptcy case for the amount of these expenses. You will be sent a claim form in due course. You do not need to file anything before then, and filing anything before then will not get you paid any sooner. If you have expenses that have not been turned in on an expense report, you should submit that report (by mail, to Accounts Payable), keeping a copy for your records. What about my health claims? Employee health (medical) insurance claims are also prepetition. If such claims have not been paid by the Company, they will be caught up in the bankruptcy and payment and will, at a minimum, be deferred for several months and may be denied entirely. Unpaid health insurance claims will be entitled to priority together with your unpaid wage claims, up to an aggregate maximum of $4,650 (all of your claims combined). To the extent you have unpaid health claims, you may want to discuss this situation with your doctor or hospital soon. At a minimum, you should demand that any doctor or hospital continue to provide the United HealthCare negotiated discounts. We understand this will create an extreme hardship for certain individuals. This is how the law works. It is beyond our ability to convince the court to allow selected claims to be paid. If you participate in any AFLAC sponsored plans (other than the flex spending accounts), you should contact AFLAC directly to continue such plans. Amounts you contributed to flex plans (dependent care or health care accounts), that have not been paid to you, are prepetition claims which may be aggregated with wages and other claims to receive priority up to the $4,650 limit. What about the Dental and Vision Plans? The dental and vision plans will likely cease as of August 1, 2002. What about the 401(k) plan? Amounts invested in the 401(k) plan, including the Company match, are not affected by the Chapter 11 filing. No funds in the 401(k) were invested in Vanguard stock. In the event the Company cannot reorganize, the plan will be terminated and unvested accounts will become vested. If you wish to withdraw your funds from the plan, please contact Benefits Disbursement, The Premiere Solution, 57 Germantown Court, Suite 400, Cordova, TN 38018. What about Vanguard stock? Any Vanguard stock you hold (including stock purchased in the Employee Stock Purchase Plan) is almost certainly worthless and it is likely you will be entitled to claim a capital loss on such stock this year. What happened to the Air Transportation Stabilization Board (ATSB) loan? Had we received ATSB loan approval earlier this year, I am confident we would have survived. But we did not. Although we were having a little success in convincing ATSB that Vanguard should receive a loan, we ran out of time. We discuss the ATSB further in our press release. What about our Senators and Congressmen? Senators Kit Bond and Jean Carnahan, Congressman Sam Graves, Congresswoman Karen McCarthy, Congressman Dennis Moore, and a number of other senators and Congressmen, Mayor Kay Barnes and Governors Bill Graves and Bob Holden, all worked hard to convince ATSB to promptly approve Vanguard's application. They did everything they could to support our application and efforts to obtain additional financing. We even appealed to the President who did see our request. Who will manage the Company? In large part, this question needs to be answered by the Bankruptcy Court. We are asking the Court to approve the continued employment of a core group of individuals for a few days, who could work with a new investor to return the Company to flying condition. If a new investor does not come forward in the next few days, it is likely that continued employment will be confined to a small group of about 15 individuals directly involved in liquidating the Company. How do I contact the Company? We expect the Company to continue to receive mail and a limited number of phone calls at the 533 Mexico City Avenue, Kansas City, MO 64513 location and we have established [email protected] to receive email. You may also contact the Company's Chapter 11 counsel, who is: Polsinelli, Shalton, Welte 700 West 47th Street, Suite 100 Kansas City, MO 64112-1802 Attention: Dan Flanigan There are a number of issues that need to be addressed in the initial stages of a Chapter 11 filing, should a new investor materialize. We kindly request that you do not contact the Company until Monday August 5th. At that time, we will be better able to answer your questions.
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Old Jul 30, 02, 6:12 am
  #2  
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Vanguard Airlines plans to file for Chapter 11

Vanguard Airlines Inc. (OTC BB:VNGD.OB - News) on Tuesday said it plans to file for Chapter 11 bankruptcy and has suspended operations, after being denied government loan guarantees to alleviate financial hardships stemming from the Sept. 11 attacks.

http://biz.yahoo.com/rf/020730/airlines_vanguard_3.html
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Old Aug 2, 02, 1:01 pm
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First, a Discontinued Program.
Now a Discontinued Airline! http://www.flyertalk.com/forum/biggrin.gif

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