## Facts

- Express One International, Inc., a charter and cargo air carrier operating worldwide with a fleet of over 40 aircraft, filed a voluntary Chapter 11 petition around June 5, 1995, and continued operating as debtor in possession.
- The case involved several thousand creditors and asserted prepetition claims exceeding $100 million, creating significant operational and creditor-constituency complexity.
- Express One received the initial 120-day exclusivity period to file a plan and a subsequent extension under 11 U.S.C. § 1121(d).
- During the second exclusivity period, Express One filed a plan of reorganization and disclosure statement on January 18, 1996.
- Kitty Hawk Charters, Inc., a competing air carrier, moved on February 13, 1996, to terminate exclusivity so it could file its own plan, asserting it could offer creditors greater benefits.
- Express One sought a further (third) extension of exclusivity to continue plan negotiations and advance toward approval of its disclosure statement and confirmation.
- The official committee of unsecured creditors supported Express One’s continued exclusivity and did not support Kitty Hawk’s effort to obtain plan-filing access.

## Issues

1. Whether “cause” existed under 11 U.S.C. § 1121(d) to further extend Express One’s exclusive period to file a Chapter 11 plan.
2. Whether exclusivity should be terminated or not extended to allow Kitty Hawk, a competitor, to file a competing plan.

## Decision

- The court granted Express One’s motion to extend exclusivity.
- The court denied Kitty Hawk’s motion to terminate exclusivity.
- The court found cause for extension based on the size and complexity of the case, the debtor’s progress (including filing a plan and disclosure statement), and creditor-committee support.
- The court rejected termination based solely on a third party’s assertion that it could propose a “better” plan, particularly where the movant was a competitor with strategic incentives.

## Legal Principles

- Under 11 U.S.C. § 1121(d), “cause” to extend or reduce exclusivity is determined case by case and may include the size and complexity of the case, the debtor’s progress toward a plan, good-faith negotiations, the debtor’s performance while in Chapter 11, and whether extension would prejudice creditors.
- Exclusivity is intended to give the debtor a fair opportunity to propose a confirmable plan consistent with fiduciary duties, not to serve as a mechanism for third parties to seize control of plan formulation.
- The prospect of a competing plan offering allegedly superior economics, without more, is insufficient to terminate exclusivity where the debtor is making concrete progress and creditors are not shown to be harmed by a limited extension.
- Courts may consider the movant’s posture (including competitive motives) when assessing whether terminating exclusivity would further Chapter 11’s collective process and preserve the debtor’s going-concern reorganization prospects.

## Conclusion

The court held that the debtor showed cause to extend plan exclusivity in a complex Chapter 11 where the debtor had filed a plan and was progressing toward confirmation with creditor-committee support, and it refused to terminate exclusivity to permit a competitor to pursue a competing plan based primarily on claimed superior recoveries.


In re Express One Int’l, Inc., 194 B.R. 98 (Bankr. E.D. Tex. 1996)