Canada 3000 Must Show Update of Its Finances

Canada 3000 Inc., which halted flights last week, was ordered by an Ontario County Superior Court judge to produce an update of its finances by this afternoon and be ready to appear in court Tuesday for a hearing on its future.

Justice John Ground told the airline at a hearing late last week to prepare a new cash-flow statement and specify the whereabouts of its 38 aircraft. Canada 3000 also must report any progress in negotiations with creditors and with the federal government over a $47-million loan guarantee.

Canada’s No.2 airline grounded its fleet with debt, excluding aircraft leases, of $130 million, and about $750,000 in cash. The airline said it needs to shed 1,500 workers and reduce capacity by 30% to resume flights.

The airline shut down after the airport in St. John’s, Newfoundland, seized a Canada 3000 aircraft, airline spokeswoman Angela Saclamacis said. The judge on Thursday granted the airline protection from creditors under the Companies’ Creditors Arrangement Act.

The judge also ordered the airports to release Canada 3000 planes so they could be returned to the carrier’s hub at Toronto’s Pearson International Airport. The judge ordered all Canada 3000 planes grounded pending Tuesday’s hearing.

Pamela Huff, a lawyer who represents Canada 3000 creditor CIT Financial Corp., said the airline owes her client $15 million in aircraft lease payments and $5 million for equipment leases.