A potential buyer has emerged for Sun Country Airlines, but the carrier's bankruptcy attorney said Thursday that a specific bid hasn't been made.
In a court filing, the airline said Sun Country recently received "a letter of interest from a qualified prospective buyer indicating a price which may be of interest."
Michael Meyer, Sun Country's bankruptcy counsel, declined to name the interested party on Thursday. But he said he anticipates it will enter a period of due diligence and fully evaluate the company before it would make a firm offer.
The Mendota Heights-based airline filed for bankruptcy in October 2008 just days after its majority stockholder, Tom Petters, was arrested on fraud-related charges.
Petters was convicted on Wednesday of 20 counts of mail and wire fraud, money laundering and conspiracy to commit those crimes. Petters hasn't been involved in the management of the low-fare airline for more than a year, but Petters Aviation still owns all of the voting shares in Sun Country.
Meyer said: "Are we going to sell the company and distribute the money or take a different approach?"
Sun Country informed the bankruptcy court in late November that it had negotiated a proposed plan of reorganization with the creditors committee and others, in which its major creditors would become shareholders.
But the airline said in its court filing that it would be "premature" to take that path because a strong bid could be made by the prospective buyer.
On Wednesday, U.S. Bankruptcy Judge Robert Kressel signed an order granting Sun Country's request to take more time before presenting a business reorganization plan to the court. Sun Country's exclusive right to file its plan has been extended through Feb. 5.
With the support of the creditors committee, Sun Country has been working with investment banker Raymond James to solicit bids for the low-fare carrier that was founded in 1982. It has operated under several ownerships, and Petters purchased a substantial stake in the carrier in late 2006. He then bought the rest of the voting shares from a hedge fund a year later.
Sun Country has provided low-fare competition to Northwest Airlines in the Twin Cities, and it is on the eve of entering its first quarter, when its passenger traffic surges as Minnesotans flee to warm-weather destinations.
Sun Country CEO Stan Gadek, who joined the airline in early 2008, has focused on closing the gap between Sun Country's expenses and revenue. For the four quarters ending in June, Sun Country produced a profit of $5 million on operating revenue of $218 million. That was a dramatic turnaround from the four quarters that ended in June 2008, when Sun Country lost $47 million on operating revenue of $251 million. The privately held carrier reported those figures to the Department of Transportation.
The recession has been tough on Sun Country and other carriers. In its court filing, Sun Country said its revenue and fuel expenses in recent months have not met expectations. Consequently, the airline said it may need to modify its operating plan for 2010.
Liz Fedor • 612-673-7709