Unsecured creditors of bankrupt Gulfstream International Group Inc. are hoping a liquidation plan they put forward for the former airline will be confirmed in August.

Judge John K. Olson of the U.S. Bankruptcy Court for the Southern District of Florida in Fort Lauderdale will consider confirmation of the plan on Aug. 16. Olson signed an order conditionally approving the plan's disclosure statement on July 19.

During its bankruptcy case, the Fort Lauderdale, Fla.-based owner of a regional air carrier and a flight-training business sold its assets to alternative asset management firm Victory Park Capital Advisors LLC in a deal valued at roughly $9 million. The sale received court approval on Jan. 7.

Through the sale, the debtor repaid $3.65 million in prepetition debt owed to Shelter Island Opportunity Fund LLC; repaid its $1.7 million debtor-in-possession loan with Shelter Island; and paid $2.3 million in administrative claims.

Victory Park Capital also acquired the debtor's aircraft from lessor Raytheon Co. for roughly $18.7 million.

Under the amended plan, filed on July 20, any administrative claims that were not already paid would be repaid in full in cash. Priority tax and priority nontax claims would also be repaid in full. Other secured creditors would also be repaid in full.

General unsecured creditors, owed an estimated $10 million, would receive a pro-rata share of a liquidating trust that would contain $625,000 in cash and causes of action, the plan said. Intercompany claims and equity holders would be wiped out.

Gulfstream filed for Chapter 11 on Nov. 4 with four affiliates, including operating units Gulfstream International Airlines Inc. and Gulfstream Training Academy Inc. The cases have been jointly administered.

The company sought bankruptcy protection after it failed to secure an additional $1 million investment from SAH-VUL Strategic Partners I LLC or financing from other sources. Gulfstream received a $1.5 million investment from SAH-VUL earlier this year that included an option to extend the second funding tranche in exchange for a secured convertible promissory note and stock warrants.

The debtor said in court papers that it completed an initial public offering in December 2007 in which it raised $5.5 million to pay off its debt and for working capital. But it experienced operating losses in late 2007 and 2008 because of spiking oil prices and high maintenance expenses associated with the airline's fleet.

Gulfstream sold certain aircraft, exited unprofitable markets and in September 2008 raised $6.5 million in debt, which helped improve its finances. But weak passenger demand, new competition and climbing fuel prices caused Gulfstream's results to drop again in late 2009 and early 2010.

When it filed for bankruptcy protection, Gulfstream was a regional air carrier that operated a fleet of turboprop Beechcraft 1900D aircraft and specialized in providing travelers with access to niche locations not typically covered by major carriers, court filings said. The company operated more than 150 scheduled flights per day, with nine destinations in Florida and 10 in the Bahamas, among others. It flew as a Continental Connection carrier and also operated flights for United Air Lines Inc., Northwest Airlines Inc. and Copa Holdings SA through code-share agreements.

Counsel to the official committee of unsecured creditors is Robert A. Schatzman, Steven J. Solomon and Ji Hun Kim at GrayRobinson PA.

Debtor counsel is Brian K. Gart at Berger Singerman PA.