Bankruptcy for Atlas

Bankruptcy for Atlas

Copyright 2003, Traffic World, Inc.

Atlas Air Worldwide Holdings plans to file for Chapter 11 bankruptcy protection in the first half of December. The Purchase, N.Y.-based company has pre-negotiated a filing in an effort to quickly restructure and emerge from bankruptcy.

Atlas plans to secure agreements with its major creditors and lessors before filing for bankruptcy. The cargo carrier has been renegotiating its debt since March, when it announced that it was deferring all payments on debt and aircraft leases for its Boeing 747 planes.

Atlas officials said they cannot predict how long the company might spend reorganizing under Chapter 11 or what the ultimate product might look like. The company cautioned that its existing equity and other securities could be rendered useless or at least worth far less than they are now.

A chief reason for the bankruptcy plan is the fact that the company''s auditor, Ernst & Young LLP, has determined it will be unable to complete a re-audit of Atlas''s 2000 and 2001 financial results. The auditor blamed Atlas''s inability to find necessary financial records from those years for the failure to complete the review. The failure to complete the re-audit puts Atlas in violation with federal corporate accounting and disclosure requirements.

Word that the re-audit was stalling prompted the New York Stock Exchange to suspend trading of Atlas shares on Sept. 5. Atlas stock is now being traded on the Pink Sheets LLC under a new ticker symbol, AAWH. It formerly traded as CGO.