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Case 10-28831-AJC Doc 85 Filed 07/13/10 Page 1 of 27

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION
www.flsb.uscourts.gov


In re:

ARROW AIR, INC. AND
ARROW AIR HOLDINGS CORP.1



Debtors.

§
§
§
§
§
§
§

(Chapter 11)





Case number 10-28831-AJC
Case number 10-28834-AJC

(Jointly Administered under
Case number 10-28831-AJC)





2

3

DEBTORS’ EXPEDITED APPLICATION FOR ORDER
PURSUANT TO 11 U.S.C. §§ 327(a) AND 330 AND FED.

R. BANKR. P. 2014(a) AUTHORIZING EMPLOYMENT AND

RETENTION OF SEABURY ADVISORS, LLC AS FINANCIAL ADVISORS

FOR DEBTORS IN POSSESSION NUNC PRO TUNC TO THE PETITION DATE

(EXPEDITED HEARING REQUESTED FOR JULY 22, 2010 AT 10:30 A.M.2)



Arrow Air, Inc. (“Arrow”) and Arrow Air Holdings Corp. (“Holdings”) (collectively, the

“Debtors”), apply to the Court for the entry of an order authorizing them to retain and employ

Seabury Advisors, LLC (“Seabury”) as their financial advisor in these chapter 11 cases Nunc Pro

Tunc to the Petition Date, pursuant to sections 327(a) and 330 of the Bankruptcy Code and Rule

2014 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and pursuant to the

terms of the Amended Seabury Engagement Agreement for Providing Restructuring &

Investment Banking Services (the “Engagement Letter”) and Indemnification Agreement (the

“Indemnification Agreement”) dated June 30, 2010 (collectively, the “Seabury Agreement”),3 a


1

The last four digits of the taxpayer identification number for Arrow Air, Inc. is 9045 and Arrow Air
Holdings Corp. is 0895. The Debtors’ address is 1701 NW 63rd Avenue, Building 712, Miami, FL 33126.
The Court is hearing other matters in the Debtors’ cases on July 22, 2010 at 10:30 a.m. The Debtors
request that the Court also hear this Application on July 22, 2010 so that the Debtors may resolve this
matter quickly and administer their estates efficiently.
Unless otherwise defined, capitalized terms used herein have the meanings ascribed to them in the Seabury
Agreement. Any references to or summaries of the Seabury Agreement herein are qualified by the express
terms of the Seabury Agreement, which shall govern if there is any conflict.

Case 10-28831-AJC Doc 85 Filed 07/13/10 Page 2 of 27

copy of which is attached hereto as Exhibit A. In support of this Application, the Debtors rely

on the Affidavit of Doug Yakola in Support of First Day Pleadings.

I.

Jurisdiction

1.

This Court has jurisdiction to consider this Motion pursuant to 28 U.S.C. §§ 157

and 1334. This matter is a core proceeding under 28 U.S.C. § 157(b)(2). Venue is proper in this

District under 28 U.S.C. §§ 1408 and 1409.

II.

Background



2.

The Debtors ceased scheduled service on June 29, 2010. After cessation of

scheduled service, the Debtors terminated all of their employees, except for 132 employees

whom the Debtors retained to help wind down their businesses. The Debtors filed for relief

under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) on June 30, 2010

(the “Petition Date”). The Debtors continue to manage their property and assets as debtors-in-

possession under 11 U.S.C. §§ 1107(a) and 1108.

3.

A full description of the Debtors’ business operations, corporate structure, and

reasons for commencing these bankruptcy cases is contained in the Affidavit of Doug Yakola in

Support of First Day Pleadings, which was filed on the Petition Date. The Affidavit was filed on

the Petition Date, and is incorporated herein by reference. Additional facts supporting the relief

requested in this Application are included below and in the Declaration of Michael B. Cox,

Senior Managing Director at Seabury (the “Cox Declaration”), which is attached hereto as

Exhibit B.

III. Relief Requested

4.

By this application (the “Application”), the Debtors seek entry of an order

pursuant to Bankruptcy Code sections 327(a) and 330 and Bankruptcy Rules 2014(a) and 2016,



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authorizing the employment and retention of Seabury as financial advisors for the Debtors, for

the purpose of providing financial advisory services during these chapter 11 cases, all in

accordance with the terms of the Seabury Agreement.

5.

Seabury has one of

the

largest

investment banking, restructuring, and

management consulting practices in the world dedicated to the transportation sector, with its

principal focus on the aviation and aerospace industries. Seabury has extensive experience

working with financially troubled companies in complex financial restructurings both out-of-

court and during chapter 11 cases. Seabury served as advisors with respect to financial

restructurings, new capital raisings, aircraft advisory services and/or other advisory assignments

to some of the world’s largest and most sophisticated airlines, including Air Canada, Northwest

Airlines, Avianca, Continental Airlines, Gemini Air Cargo, and US Airways Group, among

many others.

6.

The Debtors seek to retain Seabury as their financial advisors because, among

other things, Seabury and its senior professionals have an excellent reputation for providing high

quality financial advisory services to airlines in bankruptcy. Additionally, as a result of the

prepetition services provided to the Debtors, Seabury has developed knowledge of the Debtors’

financial and business operations.

7.

Prepetition, the Debtors originally retained Seabury as financial advisor on April

15, 2010. During this prepetition period, Seabury developed knowledge of the Debtors’ financial

and business operations and worked with the Debtors on numerous matters, including:

(a) Meeting with the Debtors’ management team on numerous occasions and
conducting due diligence to better understand the Debtors’ business,
operations, assets, debt structure, properties, financial condition and
prospects;

Assisting the Debtors to develop and evaluate potential restructuring


(b)



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alternatives for the Debtors, including meetings with a variety of potential
investors;


(c) Advising and meeting with management with respect to various financial

matters;


(d)

Assisting the Debtors in evaluating their businesses, assets and operations;
and


(e) Meeting with the other professionals retained by the Debtors in connection

with the restructuring process.


As a result of representing the Debtors on such matters, Seabury has acquired

8.

extensive knowledge of the Debtors and their businesses and is uniquely familiar with the

Debtors’ financial affairs, debt structure, operations and related matters. In providing prepetition

services to the Debtors in connection with these matters, Seabury’s professionals have worked

closely with the Debtors’ management and other professionals. Seabury played an integral role

prepetition in assisting the Debtors in preparing for the commencement of these cases.

Accordingly, Seabury has developed significant relevant experience and expertise regarding the

Debtors that will assist it in providing effective and efficient services in these cases. Should the

Court approve the Debtors’ retention of Seabury as financial advisors, Seabury will continue,

without interruption, to perform the services for the Debtors as described herein.

9.

Seabury will provide certain financial advisory services with respect to

developing and implementing programs, negotiations and/or transactions to liquidate certain

assets and obligations of the Debtors. Seabury’s resources, capabilities and experience in

advising financially distressed airlines will be crucial to the Debtors’ winding down their

businesses in an effective and efficient manner. The experienced financial advisors and

consultants at Seabury will fulfill a critical service that complements the services provided by the

Debtors’ other bankruptcy professionals. For these reasons, the Debtors require the advisory and



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consulting services of Seabury.

10.

Because of the various creditor constituencies as well as the Debtors’ financial

condition, the Debtors determined the need to hire a capable financial advisory firm to assist in

the bankruptcy cases. Prior to retaining Seabury, the Debtors’ senior management considered

proposals from other financial advisory firms. The Debtors evaluated each firm on a number of

criteria, including: the overall bankruptcy experience of each firm and their professionals; the

overall financial advisory capabilities of such firm; the firm’s experience in advising similar

companies in chapter 11; the likely attention of the senior personnel of the firm; and the

compensation to be charged. After due consideration of the above and as an exercise of their

business judgment, the Debtors concluded that Seabury was best qualified to provide financial

advisory services to the Debtors at a reasonable level of compensation. The terms of Seabury’s

retention were negotiated in good faith and on an arms-length basis in light of, among other

things, proposals by other prospective financial advisors.

IV.

Services Rendered

11.

If this Application is approved, Seabury will provide such financial advisory

services (the “Financial Advisory Services”), as described in greater detail in the Engagement

Letter, as Seabury and the Debtors shall deem appropriate and feasible in order to advise the

Debtors in the course of the chapter 11 cases, including, but not limited to, the following:4

a.
b.

c.
d.

Assist in the evaluation of the Debtors’ businesses and prospects;
Evaluate and respond as needed regarding the sale process and related
capital raising efforts to date;
Evaluate and/or prepare liquidation analyses;
Assist the Debtors in liquidation efforts, as needed;


4 Any description of the Seabury Agreement herein is a summary. To the extent that this Application and the terms
of the Seabury Agreement are inconsistent, the terms of the Seabury Agreement shall control. Capitalized terms
used in this Application without definition shall have the meanings assigned to them in the Seabury Agreement.



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e.

f.

g.

h.

i.

j.

k.

l.

m.

Assist in the development of the Debtors’ long-term business plans (if
any) and related financial projections;
Assist in the development of financial data and presentations to the
Debtors’ Boards of Directors, various creditors, lenders, lessors and other
third parties;
Analyze the Debtors’ financial liquidity and evaluate alternatives to
improve such liquidity;
Analyze various restructuring scenarios on the value of the Debtors and
the recovery of those stakeholders impacted by the restructuring;
Provide strategic advice with respect to restructuring or refinancing the
Debtors’ obligations;
Participate in negotiations among the Debtors, their creditors, suppliers,
lenders, lessors and other interested parties;
Provide court testimony as required relating to all aspects of the Debtors’
restructuring plans, business plan and expert witness testimony as needed;
If requested by the Debtors, assist the Debtors in developing various
strategies and options for negotiating with their pilot union;
Provide additional consulting services as requested by the Debtors from
time to time.


The Financial Advisory Services set forth in the Engagement Letter and

12.

summarized above do not encompass other financial advisory services or transactions that may

be undertaken by Seabury at the request of the Debtors not set forth in the Engagement Letter.

The terms and conditions of any such financial advisory services, including compensation

arrangements, would be set forth in a separate written agreement between the Debtors and

Seabury and would be subject to any necessary Court approval.

13.

The Debtors submit that Seabury is well qualified and able to provide the

Financial Advisory Services. Seabury has indicated a willingness to act on behalf of the

Debtors, on the terms described above and subject itself to the jurisdiction of the Court. The

Debtors have been advised by Seabury that it will endeavor to coordinate with the other retained

professionals in these bankruptcy cases to eliminate unnecessary duplication or overlap of work.



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V.

Disinterestedness of Professionals

14.

In connection with this retention, Seabury obtained from counsel to the Debtors

the names of individuals and entities, including the Debtors’ top 20 unsecured creditors, equity

security holders and secured creditors, which may be parties-in-interest in these chapter 11 cases

(collectively, the “Potential Parties-in-Interest”), and Seabury researched its “active deal list”

that lists all of the active engagements that Seabury currently represents, and questioned its

partners, to ascertain its relationships with the Potential Parties-in-Interest.

15.

To the best of the Debtors’ knowledge, information and belief, neither Seabury

nor any principal of Seabury has any connection with the Debtors or any Potential Party-in-

Interest or the Office of the United States Trustee in the matters for which Seabury is proposed to

be retained except as disclosed in the Cox Declaration.

16.

Prior to the Petition Date and since their retention on April 15, 2010, Seabury

performed certain professional services for the Debtors. Seabury received payments prior to the

Petition Date totaling $362,500 for fees and $26,314.82 for expenses representing payment in

full for prepetition services. Seabury also received a prepetition retainer in the amount of

$73,685.18 for services to be rendered in connection with these casse (the “Retainer”). Seabury

requests that any allowed interim fees and expenses will be paid pursuant to the terms of any

order entered by the Court authorizing the payment of interim compensation in these cases.

17.

Seabury has not been an underwriter for any offering of any security of the

Debtors.

18.

To the best of the Debtors’ knowledge, Seabury is a “disinterested person,” as

such term is defined in Bankruptcy Code section 101(14) and as required under Bankruptcy

Code section 327(a). The Cox Declaration, executed on behalf of Seabury in accordance with



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Bankruptcy Code section 327(a) and Bankruptcy Rule 2014, is filed contemporaneously

herewith. The Debtors’ knowledge, information, and belief regarding certain of the matters set

forth in this Application are based on, and are made in reliance on, the Cox Declaration.

19.

The Debtors submit that the retention of Seabury on the terms and conditions set

forth herein is in the best interests of the Debtors, their creditors and all parties-in-interest.

VI.

Professional Compensation

20.

Seabury has agreed to represent the Debtors for compensation at the rates agreed

on between the parties pursuant to the Engagement Letter. As more fully described in the

Engagement Letter, in consideration of the Financial Advisory Services provided by Seabury, the

Debtors have agreed to pay Seabury fees based on actual hours worked multiplied by Seabury’s

standard hourly rates. Seabury’s standard hourly rates are as follows:

Title

Chief Executive Officer
Senior Managing Director
Managing Director
Executive Director
Senior Vice President
Director
Vice President
Senior Associate
Associate
Senior Analyst
Analyst

Rate
$990
$895
$805
$765
$730
$730
$625
$515
$485
$345
$280



21.

Seabury will seek compensation and reimbursement of expenses, as specified in

the Engagement Letter. With respect to the out-of-pocket expenses for which Seabury will seek

reimbursement: (i) in connection with the incurrence of out-of-pocket expenses, Seabury will

not make a profit on those out-of-pocket expenses, (ii) in charging for out-of-pocket expenses,

Seabury will not include in the amount for which reimbursement is sought the amortization of


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any investment, equipment or capital outlay (except to the extent that such amortization is

included within the permitted allowable amounts for photocopies and facsimile transmission)

and (iii) in seeking reimbursement for out-of-pocket expenses which Seabury reasonably

incurred (including amounts for travel and lodging, data processing and communication charges,

courier services and other appropriate expenditures purchased or contracted for from a third

party), Seabury will request reimbursement only for the amount billed to Seabury by the third

party vendor and paid by Seabury to such vendor.

22.

The fees described above are at rates and in accordance with practices customarily

employed by Seabury and are generally accepted by Seabury’s clients. The rates described

above are comparable to rates generally charged by financial advisory firms of similar stature to

Seabury and for comparable engagements, both in chapter 11 and out-of-court.

23.

As part of the overall compensation payable to Seabury under the terms of the

Engagement Letter, the Debtors have agreed to certain indemnification obligations as described

in the Indemnification Agreement5. Seabury and the Debtors believe that such provisions are

customary and reasonable for financial advisory and investment banking engagements, both out-

of-court and in chapter 11. See, e.g., In re Comdisco, Inc., No 02-C-1 174 (N.D. Ill. Sept. 23,

2002) (affirming order authorizing indemnification of Lazard Freres & Co. LLC and Rothschild,

Inc. by debtors and official committee of unsecured creditors); In re United Artists Theatre Co.,

No. 00-3514-SLR (Bankr. D. Del. Dec. 1, 2000) (order authorizing the indemnification of

Houlihan Lokey Howard & Zukin Capital by the debtors); In re Joan & David Halpern, Inc.,

248 B.R. 43 (Bankr. S.D.N.Y. 2000), aff’d, 2000 WL 1800690 (S.D.N.Y. Dec. 6, 2000); In re


5

The Indemnification Agreement provides that the Debtors will indemnify Seabury, except “to the extent
that it is finally judicially determined, or expressly stated in an arbitration award, that such Liabilities
resulted primarily from the willful misconduct or gross negligence (which in all cases hereunder will be
deemed to include any violation of applicable law) of the Indemnified Person seeking indemnification.”




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CTC Communications Group Inc., No. 02-12873 (PJW) (Bankr. D. Del. Nov. 15, 2002) (order

authorizing retention of Miller Buckfire Lewis & Co. on similar terms); In re PC Landing Corp.,

No. 02-12086 (PJW) (Bankr. D. Del. Oct. 10, 2002) (same); In re Metrocall Inc., No. 02-11579

(RB) (Bankr. D. Del. July 8, 2002) (order authorizing retention of Lazard Freres & Co. under

similar terms); In re Kaiser Aluminum Corp., No. 02-10429 (JKF) (Bankr. D. Del. Mar. 19,

2002) (same); In re W.R. Grace & Co., No. 01-01139 (JJF) (Bankr. D. Del. June 22, 2001) (order

authorizing retention of Blackstone Group under similar terms); In re Ameriserve Food

Distribution, Inc., Case No. 00-0358 (PJW) (Bankr. D. Del. May 9, 2000) (order authorizing

retention of Houlihan Lokey Howard & Zukin Capital); In re National Steel Corporation, No.

02-08699 (JHS) (Bankr. N.D. Ill. Mar. 20, 2002); In re Conseco Inc., 02-49672 (CAD) (Bankr.

N.D. Ill. Jan. 14, 2003) (order authorizing retention of Lazard Freres & Co.); In re Oxford

Automotive, Inc., No. 02-41400-R (SWR) (Bankr. D. Mich. Apr. 30, 2002) (same).

24.

As set forth in the Cox Declaration, Seabury has not shared or agreed to share any

of its compensation from the Debtors with any other person, other than a managing director,

professional or employee of Seabury, as permitted by Bankruptcy Code section 504.

VII. Fee Applications

25.

During the course of these cases, Seabury will apply to the Court for allowance of

compensation for professional services rendered and reimbursement of expenses incurred in

these chapter 11 cases in accordance with the applicable provisions of the Bankruptcy Code, the

Bankruptcy Rules, the Local Rules of the United States Bankruptcy Court for this district (the

“Local Bankruptcy Rules”), and any orders entered in these cases governing professional

compensation and reimbursement for services rendered and charges and disbursements incurred.

26.

Seabury’s professionals shall file time records in accordance with the Guidelines



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for Fee Applications for Professionals in the Southern District of Florida in Bankruptcy Cases.

Seabury also will maintain detailed records of any actual and necessary costs and expenses

incurred in connection with the aforementioned services.

Seabury’s applications for

compensation and expenses will be paid by the Debtors, pursuant to the terms of the Engagement

Letter, subject to approval by the Court.

WHEREFORE, the Debtors respectfully request that the Court enter an order (i)

authorizing the Debtors to retain Seabury as their financial advisor pursuant to the terms of the

Engagement Letter, Indemnification Agreement, and 11 U.S.C. §§ 327(a) and 330 and (ii)

granting such other and further relief as is just and proper.









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Dated July 13, 2010.

Case 10-28831-AJC Doc 85 Filed 07/13/10 Page 13 of 27




Exhibit A



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Exhibit B

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UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION
www.flsb.uscourts.gov


In re:

ARROW AIR, INC. AND
ARROW AIR HOLDINGS CORP.



Debtors.



§
§
§
§
§
§
§

(Chapter 11)





Case number 10-28831-AJC
Case number 10-28834-AJC

(Jointly Administered under
Case number 10-28831-AJC)

UNSWORN DECLARATION OF MICHAEL B. COX IN SUPPORT OF

DEBTORS’ APPLICATION FOR ORDER AUTHORIZING EMPLOYMENT

AND RETENTION OF SEABURY ADVISORS, LLC AS FINANCIAL ADVISORS

FOR DEBTORS IN POSSESSION



Michael B. Cox states and declares:

1.

I am a Senior Managing Director of the firm Seabury Advisors, LLC (and its

broker-dealer affiliate Seabury Securities LLC) (collectively “Seabury” or the “Firm”), which is

a financial advisory and consultancy firm that maintains offices at 1350 Avenue of the Americas,

25th Floor, New York, New York 10019. I am authorized to execute this declaration on behalf

of Seabury. Unless otherwise stated in this declaration, I have personal knowledge of the facts

set forth herein.1

2.

This declaration is being submitted in connection with the proposed retention of

Seabury as Financial Advisor to Arrow Air, Inc. (“Arrow”) and Arrow Air Holdings Corp.

(“Holdings”) (collectively, the “Debtors”), pursuant to the terms and conditions set forth in the

Seabury Engagement Agreement for Providing Restructuring & Investment Banking Services

dated as of June 30, 2010(the “Engagement Letter”) and the indemnification agreement between


1 Certain of the disclosures herein relate to matters within the knowledge of other professionals at Seabury and are

based on information provided by them.

Case 10-28831-AJC Doc 85 Filed 07/13/10 Page 23 of 27


Seabury and the Debtors attached to the Engagement Letter (the “Indemnification Agreement”)



(collectively, the “Seabury Agreement”).2

3.

Seabury is recognized for its expertise in providing financial advisory services to

airlines and their shareholders, in financially distressed situations, including advising debtors,

creditors and other constituents in Chapter 11 proceedings and serving as investment bankers in

numerous cases.

4.

Based on the results of the conflict search conducted to date and described more

fully below, to the best of my knowledge, neither I, Seabury nor any member or employee

thereof, insofar as I have been able to ascertain, has any connection with the Debtors, their

creditors, other parties-in-interest (as reasonably known to us), their respective attorneys, or the

U.S. Trustee or any person employed in the Office of the U.S. Trustee, expected as disclosed or

otherwise described herein.

5.

To the best of my knowledge, Seabury is a “disinterested person” as the term is

defined in section 101(14) of title 11 of the United States Code (as amended, the “Bankruptcy

Code”), as modified by section 1107(b) of the Bankruptcy Code. Neither Seabury nor its

members or employees:

(a)

(b)

are creditors, equity security holders or insiders of the Debtors;

are or were, within 2 years before the date of the filing of the petition, a director,

officer or employee of the Debtors; or

(c)

have an interest materially adverse to the interest of the estate or any class of

creditors or equity security holders, by reason of any direct or indirect relationship

to, connection with, or interest in, the Debtors, or for any other reason.


2 Unless otherwise stated, capitalized terms used herein shall have the meanings ascribed to them in the Application.



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6.

As part of its diverse practice, Seabury appears in numerous cases, proceedings

and transactions involving attorneys, accountants, investment bankers and financial consultants,

some of which may represent claimants and parties-in-interest in the Debtors’ chapter 11 cases.

Further, Seabury has in the past, and may in the future, be represented by attorneys and law firms

in the legal community, some of whom may be involved in these proceedings. In addition,

Seabury has in the past and will likely in the future be working with or against other

professionals involved in these cases in matters unrelated to these cases. In connection with this

retention, Seabury obtained from counsel to the Debtors the names of individuals and entities,

including the Debtors’ top 20 unsecured creditors, equity security holders and secured creditors,

which may be parties-in-interest in these chapter 11 cases (collectively, the “Potential Parties-in-

Interest”), and Seabury researched its “active deal list” that lists all of the active engagements

that Seabury currently represents, and questioned its partners, to ascertain its relationships with

the Potential Parties-in-Interest. To the best of my knowledge, information and belief, neither

Seabury nor any principal of Seabury has any connection with the Debtors or any Potential

Party-in-Interest or the Office of the United States Trustee in the matters for which Seabury is

proposed to be retained, except as set forth in paragraph 7 below, and, based on our current

knowledge of the professionals involved, and to the best of my knowledge, none of our current

business relations constitute interests materially adverse to the Debtors herein in matters upon

which Seabury is employed.

7.

Seabury has in the past represented, may currently represent, and likely in the

future will represent parties-in-interest of the Debtors in connection with matters unrelated to the

Debtors and their chapter 11 cases (except as described below). This process is conducted by



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Seabury’s compliance department, and in connection therewith, the following specific



disclosures are made:

(a)

The Debtors may supply services to and be a creditor of one or more companies

that Seabury is advising. The Debtors may also (i) purchase goods or services

from, (ii) be an obligor to, and/or (iii) have a commercial alliance with one or

more companies that Seabury is advising. Seabury does not believe that any

relationship is related to the Debtors’ chapter 11 cases nor will interfere with or

impair Seabury’s representation of the Debtors in these chapter 11 cases.

(b)

Seabury is engaged to provide advisory services to various undisclosed airlines.

Seabury is currently unable to disclose the identity of these clients due to

confidentiality clauses in its engagement letters. These clients may or may not be

direct or indirect competitors of the Debtors. Seabury believes it would adversely

affect the interests of these clients if Seabury were to publicly disclose their

names at this time. Seabury does not believe that its work for these clients will

adversely affect the Debtors. None of the persons involved in this assignment are

involved in the assignments for the aforementioned undisclosed clients.



8.

Seabury has not been retained to assist any entity or person other than the Debtors

on matters relating to, or in connection with, their chapter 11 cases. If this Court approves the

proposed employment of Seabury by the Debtors, Seabury will not accept any engagement or

perform any services for any entity or person other than the Debtors in this situation. Seabury

will, however, continue to provide professional services to entities or persons that may be

creditors of the Debtors or parties in interest in the Debtors’ chapter 11 cases; provided,



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however, that such services do not relate to, or have any direct connection with, the Debtors’



chapter 11 cases.



9.

The Debtors initially retained Seabury on April 15, 2010, and on June 30, 2010

executed an amended and restated engagement letter. Pursuant to this retention, as amended, and

during the prepetition period, the Debtors paid Seabury in full for all prepetition fees and

expenses. Accordingly, Seabury is not a creditor of the Debtors.

10.

Seabury has not shared or agreed to share any of its compensation from the

Debtors with any other person, other than a principal, professional or employee of Seabury, as

permitted by section 504 of the Bankruptcy Code. The proposed engagement of Seabury is not

prohibited by Fed. R. Bankr. P. 5002.

11.

Based upon the foregoing, I believe Seabury is disinterested as defined in section

101(14) of the Bankruptcy Code as modified by section 1107(b) of the Bankruptcy Code and

represents no interest adverse to the Debtors.

12.

Seabury has provided and agrees to continue to provide assistance to the Debtors

in accordance with the terms and conditions set forth in the Application and the Engagement

Letter, which is annexed to the Application as Exhibit A. Accordingly, I make this declaration

in support of an order authorizing such retention.



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I declare under the penalty of perjury under the laws of the United States, that the

foregoing statements are true and correct.



Copies to:


SEABURY ADVISORS LLC




Michael B. Cox
Senior Managing Director



By:




All parties served with application for employment.








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