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Major military air charter files for Chapter 11 bankruptcy

The government shutdown in October did more than just put a lot of federal and military personnel in a tight financial spot -- it also affected many businesses and organizations, may they be federally-run or privately-operated. For one private business, Global Aviation Holdings, the shutdown seems to have caused their second bankruptcy of the year.

Global Aviation is a military air-charter service. The company is the largest provider of such services to the U.S. military. But with the shutdown in effect, the company's service was obviously not needed. As a result, Global Aviation -- which was just recovering from a bankruptcy filing earlier this year -- has fallen into Chapter 11 bankruptcy.

Global Aviation has more than 1,000 employees and will go through a round of layoffs to trim the payroll (likely by 16 percent).

While this certainly is not good for Global Aviation and though Chapter 11 is not something any company necessarily wants to do, such a bankruptcy can help a company recover from the tough financial times they fallen on, or it could be used to buy the company time to seek an exit strategy.

For example, a Chapter 11 filing can lead to the company being sold. The trustee appointed to your company's bankruptcy case will make sure everything is compliant and that the funds are used properly (and at the same time, the bankrupt company will want legal representation to ensure their rights are being upheld and that they are going through the process in an appropriate manner). But your company could be sold off through the bankruptcy process, giving you a clean exit from the tough financial times you face.

Source: Wall Street Journal, "Global Aviation Files for Chapter 11 Bankruptcy Protection," Peg Brickley and Patrick Fitzgerald, Nov. 12, 2013

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