BA...Vanguard will be fine? You might want to phone their headquarters to tell them. From their 10Q quarterly report:
On December 29, 2000, the Company entered into a loan agreement with a related party to borrow $3.0 million. The Company received approximately $2.6 million in cash net of the first loan payment, a security deposit and loan costs. The obligation is secured by various aircraft parts and ground equipment. The obligation is payable in monthly installments through December 2003, including interest at prime plus 2.5%. This agreement provided the Company the ability to borrow up to an additional $1.0 million under substantially the same terms as the initial loan. As of March 31, 2002, no additional borrowings had been made against this facility. At March 31, 2002 and December 31, 2001, this debt was in default due to delinquent payments. Accordingly, this amount has been classified as a current liability on the accompanying balance sheets.
In 2001, the Company entered into lease deferral notes payable for approximately $5,582,000, including approximately $200,000 of accrued interest, with certain of its aircraft lessors. Additionally in 2001, the Company issued a note payable for $999,000 to a lessor to satisfy its maintenance obligation at the scheduled return of an aircraft. Repayment of these loans, including accrued interest at 10%, generally was scheduled to commence in July 2001 with maturities varying through December 2002. To date, the Company has not made any of the payments required under these loans and was, therefore, in default of these notes at March 31, 2002 and December 31, 2001. Accordingly, these notes have been classified as a current liability on the accompanying balance sheets. These notes are callable upon demand and the Company is accruing penalty interest at an annual rate of 14%.
The Company has also not made certain payments required under its aircraft leases. All required lease payments (and interest at contractual rates) due under the Company's lease agreements (without acceleration) with respect to periods through March 31, 2002, have been accrued in the statements of operations and all such amounts which had not been paid as of March 31, 2002, are reflected as accounts payable in the balance sheets.
The Company has received notices of default from certain of its aircraft lessors. The Company intends to seek revised lease terms (including forgiveness of certain unpaid lease payments and reductions in future rental obligations) with all its aircraft lessors in connection with the Company's efforts to obtain new financing. The Company intends that such revised terms, if agreed to, would allow for the removal of the notices of default.
I really would like for Vanguard to make it...but they have a very long way to go, and their survival is in no way assured.