PAN AM ANNOUNCES SHUTDOWN OF OPERATIONS
PAN AM ANNOUNCES SHUTDOWN OF OPERATIONS NEW YORK, Dec. 4 /PRNewswire/ -- Pan Am Corporation today announced
that it was ceasing flight operations immediately.
Pan Am said that it was ceasing operations because Delta Air Lines had informed Pan Am that Delta would not lend Pan Am additional amounts needed to fund Pan Am's operations until a proposed plan of reorganization would become effective (10 days after confirmation), including the $25 million balance of the $140 million financing previously approved by the bankruptcy court. Delta also told Pan Am that it would not commit to fund the plan by providing an additional $265 million of cash as previously agreed. "Our employees have made courageous efforts in a long, hard battle to emerge from bankruptcy and start a new company and we are disappointed by the decision not to provide funding," Russell L. Ray Jr., Pan Am's president and CEO, said. "Throughout the two months I have been with Pan Am I have maintained optimism that our plan of reorganization would allow Pan Am to remain a viable carrier in the Latin America marketplace," he added. "However, without funding, we simply would not have the cash resources to provide the stability the new company would require for its employees and customers," he said. "I am especially distressed that this effort has failed after our labor leaders and employees have demonstrated that they were willing to make sacrifices to keep the company operating." Ray said, "Today, we see the end of an airline whose name will be forever forged in American history." Pan Am stated that it had reached agreements, or was in the process of reaching agreements, with its major administrative creditors and labor unions that would have enabled it to proceed with confirmation and implementation of the plan of reorganization. Pan Am added that the motion to confirm the plan would now be withdrawn. Pan Am expects that as a result of a prior agreement between Pan Am and Delta, Delta will provide Pan Am ticketholders service on comparable flights on Delta or on another carrier or otherwise accommodate the holder. -0- 12/4/91 /CONTACT: Jeffrey F. Kriendler of Pan Am, 212-880-6250, or after hours, 212-247-2800/ CO: Pan Am Corporation ST: New York IN: AIR SU: CK-KW -- NY031 -- 9108 12/04/91 10:31 EST
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|Date:||Dec 4, 1991|
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