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Restructuring: Mesa Vendor/Supplier Q&AImpact on Vendors1. Does this mean Mesa is going out of business? Absolutely not! This is a financial reorganization, not a liquidation. Chapter 11 is a legal mechanism for court-supervised reorganization or restructuring of a company’s obligations. 2. Will vendors continue to be paid for goods and services they provide to Mesa and its business units? Yes, the Bankruptcy Code provides priority status for post-petition orders and shipments (goods and services received from January 5, 2010, forward) that you provide to us. Therefore, you can be assured that we can and will pay for the goods and services you provide to us going forward. Unfortunately, federal law prohibits payment for goods and services received before January 5, 2010 except pursuant to a court order or plan of reorganization that is accepted by creditors and approved by the Court. 3. I have unpaid invoices dated before the bankruptcy date (i.e., pre-petition invoices). What should I do? You will receive a claim form in the mail in the coming weeks with instructions for how to submit a claim. The Court will eventually set a deadline for all claims to be filed. This deadline is known as the Bar Date. You will receive notice of this deadline once it is set. Any invoices for goods received or services provided prior to the date of filing are now considered pre-petition. Early in the bankruptcy proceeding, the Company will file a schedule of all known creditors and the amount the Company believes each creditor is owed. If you appear on the schedules, and your claim is not listed as disputed, contingent or unliquidated, and you agree with the scheduled claim amount, you do not need to do anything and your claim will be paid under the terms of the Plan. If you do not appear on the schedules, if you disagree with the scheduled amount of your claim, or your claim is listed as disputed, contingent or unliquidated, then you must submit a claim. If the Company determines you have a valid claim, your claim will be treated as described in the Company’s Plan of Reorganization which must be approved by the Bankruptcy Court. At this time, the Company has not submitted a Plan of Reorganization but is working diligently toward one. 4. How do I file a proof of claim? A complete list of creditors, including your company, is being prepared by our attorneys. A noticing agent will send official notice of the filing and the first creditors’ meeting to all listed creditors. Sometime after the first creditors’ meeting, the Court will set a deadline for filing proofs of claim and you will be mailed a notice telling you of the deadline, or Bar Date, along with a claim form. All claims will be filed with Epiq Systems. If you wish to file a proof of claim sooner, please contact them at +1-(646) 282-2400, or visit the Epiq website at http://chapter11.epiqsystems.com/mesa. Additional information can be found at the Mesa website at www.mesa-air.com/restructuring. 5. When will vendors receive payment for goods and services delivered after the bankruptcy date? All obligatiotions for goods and services incurred post-petition (after the Chapter 11 filing date) will be paid timely, under current terms and conditions. 6. Will suppliers be paid for goods and services provided to Mesa during your Chapter 11 bankruptcy proceedings? Yes. Under U.S. bankruptcy law, we are required to pay suppliers in full and under normal credit terms for goods and services provided during our bankruptcy proceedings. 7. What is the status of existing supplier agreements? The status of our agreements remains unchanged and we intend to honor these under existing terms and conditions. Again, we are operating in the normal course of business. 8. Why should suppliers continue to provide goods and services to Mesa? You will be paid in full for all goods and services provided after the filing date as required by the U.S. Bankruptcy Code. We view our suppliers and vendors as partners and while we apologize for any hardship this may cause, we hope to be able to work with you for many years to come. Moreover, pre-petition claims will be resolved through the Company’s Plan of Reorganization. No plan has been filed or approved by the Court at this time, so we cannot say how creditors will be treated. 9. Do I need an attorney to file a claim? You are not required to hire an attorney to file a claim but you may choose to do so. 10. What if I have an uncashed check? Unfortunately, federal law requires the Company to cancel any checks for pre-petition goods and services that have not been cashed or deposited by the January 5, 2010 filing date unless the check relates to a claim that the Company has received court authority to pay. If your check is cancelled, you may have to file a claim unless your claim amount is properly identified by the Company on schedules that will be filed with the Court. You will receive instructions about whether and how to file a claim in the coming weeks. We sincerely regret any hardship this may cause. 11. What if I wait to submit an invoice until after the filing date? Invoices for services provided and goods received before the filing date (January 5, 2010) will be considered pre-petition and are subject to the “Automatic Stay” that is triggered by the Chapter 11, regardless of when you submit your invoice. Waiting to submit an invoice until after the filing date will not allow you to be paid for the work performed pre-petition. 12. Given the uncertainty of the situation, I want to renegotiate my terms with Mesa. Due to the protection the courts provide to suppliers post-petition, we are an even better credit risk today. We cannot pay more for goods and/or services at this time. Our ability to purchase from you on favorable terms and at competitive prices is critical. We expect in the months and years ahead to be as good a customer to you as we have been in the past. We hope you will continue to work with us. 13. I want my merchandise/equipment back, and I’m sending someone to get it. Taking back goods from a company that has filed Chapter 11 is against the law. Check with your legal counsel before taking any such action. 14. As an unsecured creditor, who is looking after my interests? The U.S. Trustee, an arm of the Justice Department, will most likely appoint a committee of unsecured creditors to oversee the interests of all unsecured creditors in the case. The U.S. Trustee will send out notice of the meeting to form the committee to all unsecured creditors. That organizational meeting typically takes place within the first two weeks of the case. Impact on Mesa Air’s Operations 15. Why did Mesa file for Chapter 11 protection? Over the past two years, we have worked closely with our lessors, creditors and other constituents to restructure our financial obligations. These efforts have led to the elimination of over $160 million of debt obligations, the return of a number of aircraft, and the restructuring of inventory management and engine overhaul agreements. We are nonetheless faced with an untenable financial situation resulting primarily from our continued lease obligations on aircraft excess to our current requirements. After careful consideration, the Company determined that a Chapter 11 filing provides the most effective and efficient means to restructure with minimal impact on the business and our customers. This process will allow us to eliminate excess aircraft to better match our needs and give us the flexibility to align our business to the changing regional airline marketplace, ensuring a leaner and more competitive company poised for future success. 16. What is Mesa’s liquidity situation? Are you seeking additional financing? We currently have ample cash on hand to fund operations while we take steps to further strengthen our company. 17. How long is Mesa’s Chapter 11 reorganization likely to take? This process can last varying amounts of time, but it should be recognized that this is a significant restructuring in a volatile market. As Mesa moves forward with its restructuring efforts it will have more insight into the length of the overall restructuring effort. 18. Will current management remain in place? One of the key aspects of Chapter 11 is that management remains in place. Our management remains committed to the future success of the business. 19. Is Mesa Air Group for sale? No. The Company intends to restructure its operations and emerge from Chapter 11 equipped for long term success. 20. Will this filing affect your current code-share agreements? Not at all. We continue to operate in the normal course of business just as before. 21. How will you maintain customers during this process? We will continue to do what we do best – provide our customers with low cost regional jet service from our leading regional airline. Our restructuring will not affect our day-to-day operations and this process will be seamless to our customers as this is simply a financial restructuring. As with all of our important constituents, we are keeping our customers well informed during this process. 22. Who should my lawyer contact if he/she has questions for counsel? Maria Bove Pachulski Stang Ziehl & Jones LLP 780 Third Avenue, 36th Floor New York, New York, 10017 212-561-7700 23. Where did the Company file its petition? The Company filed its Chapter 11 petition in the United States Bankruptcy Court for the Southern District of New York. 24. Who should suppliers contact if they have additional questions? Additional information about Mesa’s reorganization process, including FAQs for Suppliers, is available at the website of our Claims Administrator Epiq Systems at http://chapter11.epiqsystems.com/mesa, or by calling our vendor hotline at +1-(646) 282-2400. In addition, the Company has added a section to our website. You can access it at: www.mesa-air.com/restructuring. |
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