Yesterday Judge Robert E. Gerber of the United States Bankruptcy in New York granted GM’s request to invalidate its leases on seven corporate jets and its huge hanger at the airport in Wayne County, Michigan.
Since the motion was unopposed — would anyone out there seriously consider arguing for corporate jets in the current political environment? — the hearing was short.
The Honorable Gerber ruled that GM could reject the leases under section 365 of the U.S. Bankruptcy Code, effective on the date of GM’s surrender of the planes and their hanger. AVN Air, LLC (AVN), General Electric Capital Corporation (GE Capital), SunTrust Equipment Finance & Leasing Corp. (SunTrust), Wayne County Airport Authority (WCAA) and US Bank were the business entities holding the leases.
The jets in question – two Gulfstream G5 models and five G4 models – are among the most expensive private aircraft in the world, ranging in price from $40 million to $50 million each when new, depending on optional equipment and custom interiors. Determining the fair market value of the jets in the currently depressed market for aircraft is difficult since few are selling.