Global Aviation Sees Appeal In FedEx Suit, Early 2012 Resolution

The head of Global Aviation Holdings Inc. said Wednesday that it will be early 2012 before there is any resolution in a $99.3 million lawsuit involving FedEx Corp. (FDX).

Global Aviation, which owns the World Airways cargo airline, was a guarantor to bankrupt ATA Airlines Inc. on contracts involving the transport of personnel and cargo for the U.S. military. It stands to receive a payout if a court upholds an earlier award against FedEx.

ATA's estate sued FedEx in 2008 and last year was awarded $66 million in damages, raised in January to $71.3 million including interest.

FedEx has appealed the award, and Global Aviation Chairman Robert Binns said on an investor call Wednesday that he expected this to be heard in "early 2012".

Binns also said the estate is expected to launch its own appeal against a separate $28 million claim against FedEx related to the military flying that the court rejected.

"I think you can assume it's going to go to a full appeal," he said.

ATA's Chapter 11 reorganization plan sees 85% of any damages recovered from FedEX going to Global Aviation, wiuth 7.5% reserved for the failed carrier's staff and the same distributed to certain unsecured creditors.

FedEx officials were not immediately available for comment.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com

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