Western Global Airlines filed for bankruptcy protection with plans to slash its debt load after the cargo airline faced a cash crunch.

The airline listed assets of as much as $500 million and debt of as much as $1 billion in a Chapter 11 petition filed in Delaware. The filing allows Western Global to keep operating while it seeks court approval of a restructuring plan that will ease its debt burden by more than $450 million, according to a statement.

Western Global, based in Estero, Florida, provides air cargo services to airlines, logistics companies and the US military. The closely held company struck a deal with creditors to restructure its debt via bankruptcy in late July, Bloomberg reported. 

In June, founder and Chief Executive Officer Jim Neff bought the airline’s secured debt at a steep discount as he sought to keep the company alive through a restructuring. The debt purchase irked some investors because Neff’s status as a loan holder puts him ahead of unsecured bondholders in the repayment line. He’s also helping provide more than $77 million of bankruptcy financing alongside a group of creditors.

Now that the company is in bankruptcy, Neff has “agreed to forego some of the statutory rights that he would otherwise maintain as the holder” of Western Global’s loan, according to a company statement. 

The cargo airline was burning cash as it struggled to address its financing needs amid cooling demand and labor shortages that blocked certain routes to Asia, leading to increased fuel costs, according to a March note from Moody’s Investors Service. The company’s ability to raise new financing was limited because all of its $400 million in aircraft assets and 21-plane fleet were encumbered as of September, according to the ratings firm.

The filing comes nearly three years after the airline tapped the junk bond market for the first time in summer 2020 amid the pandemic-era boom in online shopping and cheap credit. 

Western Global’s $400 million bond gave Neff a large payout as part of its plan to sell a minority stake in the company to employees.