STAMFORD, Conn. -- Alliance Global Ground Transportation of Stamford, Conn., filed for Chapter 11 bankruptcy on March 24 in U.S. Bankruptcy Court, Alan Oyugi, owner and president of the company told LCT this week.
The company began operations in 1999 and includes a charter jet service, although the company operates that division through affiliate relationships and does not own any aircraft.
Oyugi said the company intends to pay affiliates for anything outstanding but needs the umbrella of protection offered under Chapter 11 to reorganize finances. Chapter 11 bankruptcies allow protection from creditors while additional funding is secured or payment plans are created to manage and service debts.
A Chapter 7 bankruptcy basically wipes the slate clean for debtors and leaves creditors with nothing. The debtor walks away with a tarnished credit record, which generally means the death of a business.
Oyugi has been in the industry for 22 years and blamed the current economy on the demise of the company that has seen a severe slowdown in collecting receivables.
The company’s main corporate accounts include the banking and financial industry, including several hedge fund clients.
Alliance continues to operate daily. Oyugi stressed that Alliance's 27-vehicle fleet will provide local transportation and global service through a network of affiliates who all will be paid by credit card as services are rendered. All operations are under the direction and oversight of the U.S. government.
Oyugi said sales began to fall in June 2007 and ultimately dropped more than 40% by the end of 2008. To complicate the financial picture, Alliance had engaged in direct billing of clients, and as the economy worsened, payments for services rendered slowed down and become delinquent, constricting cash flow. Oyugi has since ended the practice and bills a credit card at the time services are rendered, including for major network accounts.
Source: Jim Luff, LCT contributing editor