Sale of Mendota Heights-Based Sun Country May Be Imminent

An agreement to sell Mendota Heights-based Sun Country Airlines may be imminent, according to Daryle Uphoff, attorney for the trustees overseeing the bankrupt airline.

The company has no plans to relocate at this time, said the company's marketing coordinator, Kelsey Smith, last week when the first indication of an impending sale was communicated through bankruptcy filings.  However, details of who a potential buyer may be have not been released.

The airline entered bankruptcy in October of 2008 after its then-owner, Tom Petters, was charged with operating a multi-billion dollar Ponzi scheme. The freezing of Petters’ assets effectively cut off the low-cost airline’s short-term cash flow, according to media reports at the time.

Sun Country’s holding company, MN Airlines LLC, submitted a bankruptcy plan in April 2010.

Speaking Tuesday at a bankruptcy court hearing in St. Paul, Uphoff said, “Sun County is at this point in time in process of negotiating a final agreement.” There are “intense negotiations” taking place, he added.

Uphoff secured U. S. Bankruptcy Judge Gregory Kishel’s permission not to reveal information regarding the negotiating details, as that might result in a lower price for the airline, he argued. Approached after the hearing, he declined to name the parties negotiating for the airline.

“We’re hopeful” about the outcome of those negotiations, Uphoff said, despite the fact that rising gas prices have created conditions “not favorable to Sun Country.”

Fuel is a major expense for airlines; any sudden rise in its price—such as has happened in recent weeks due to Middle East turmoil—can have a dramatic impact on the bottom line as well as fare prices.

The hearing was held to seek the judge's permission for the trustees to vote in favor of the purchase offer—a position approved by the judge.