Frontier Asks for Bankruptcy Court Extension

(MoneyWatch)  Frontier has filed a request with the bankruptcy court to ask for an extra 120 days to file their plan of reorganization without having to allow for competing plans. Right now, it's due on February 4 (already extended 120 days once before), and they're asking for it to go to June 4. I wouldn't expect to see this request denied, but it does show us that they still have a long way to go before they're ready to exit.

Relatively new bankruptcy rules allow leeway on a case only up to 18 months from the date of filing. During that time period, the company is allowed the exclusive right to file its own reorganization plan. After that time period, if no successful plan has been submitted, competing plans may be filed by alternate groups. In Frontier's case, those 18 months will be up in October of this year. But the 18 months isn't instantly granted at the time of filing. The company has the right to request an extension if more time is needed as long as it doesn't exceed 18 months. That's what happening here.

So why does Frontier need more time? Well, the company says it just can't get all the work done in time to file by February 4. Specifically, it is needed to (quoted from the filing)

1. continue to refine and implement their business model to deliver both a more efficient cost structure and future revenue growth, so that the Debtors can compete effectively within the commercial passenger aviation industry;
2. finalize implementation of the Debtors' successful restructuring initiatives;
3. finish the process of analyzing, rationalizing and, where appropriate, renegotiating the Debtors' executory contracts and related obligations;
4. continue the evaluation and reconciliation of the more than 1,400 proofs of claim that have been filed in these Cases;
5. complete their work with various potential liquidity providers to secure adequate liquidity to permit emergence from chapter 11; and
6. develop a plan of reorganization reflecting the initiatives set forth above and the many others that are underway.

Objections are due by January 13, and if necessary, a hearing will be held on January 21. My guess is that this won't be a problem.

[Thanks to airliners.net for the tip]