$2.5 Million Financing For Delta Air Lines To Emerge From Bankruptcy Is Approved By Creditors
The Official Unsecured Creditors’ Committee for Delta Air Lines has approved the conditions of the airline carrier’s $2.5 million financing plan to emerge from Chapter 11 bankruptcy.
The announcement comes as the country’s third-largest carrier company amended and made technical changes to its bankruptcy reorganization plan and follows the withdrawal of its hostile takeover bid (at least $9.8 billion) by US Airways.
Delta’s board had considered US Airways’s proposal several times but did not take any action beyond that. US Airways withdrew its bid after the unsecured creditors rejected the merger offer in favor of supporting Delta’s reorganization plan. The Arizona-based U.S. Airways Group had given the committee until February 1 to meet certain demands, including postponing Delta’s disclosure statement hearing that was scheduled on February 7, or it would pull its offer.
Also, because several creditors had objections with its disclosure statement, Delta is working with them to resolve those differences. The airline carrier wants its reorganization plan confirmed in April.
According to Doug Parker, US Airways chairman and chief executive officer, "Our proposal would have provided substantially more value to Delta's unsecured creditors than the Delta stand-alone plan. We would have created a better and more financially stable airline that offered more choice to consumers and increased job security to its employees."
Ever since US Airways's initial bid, Delta has refused to change its plans to emerge from Chapter 11 protection as a standalone company, saying that US Airways has "ignored major negative synergies that previous transactions have proven will occur," including a $23 billion total debt that would be accrued if the two companies came together. Delta says that when it emerges as a standalone company, its total debt will only be $10 billion.
Earlier this week, six financial institutions made a commitment to provide Delta with a total of $2.5 billion in exit financing.
Our attorneys at Sagaria Law P.C. represent clients in Monterey County, Santa Clara County, and Alameda County who wish to file for bankruptcy protection under Chapter 7 bankruptcy, Chapter 11 bankruptcy, or Chapter 13 bankruptcy. Our offices are located in San Jose, Fremont, and Monterey, and our clients come from Santa Clara, Palo Alto, Oakland, Berkeley, Foster City, as well as other cities in the surrounding areas. Contact Sagaria Law, P.C. to schedule your free consultation.
Delta's Creditors Approve $2.5 Billion Financing Plan, CNBC.com, February 2, 2007
U.S. Airways Pulls Delta Bid, Tampa Bay Business Journal, February 1, 2007
Related Web Resource:
U.S. Airways Withdraws Offer for Delta Airlines, US Airways
Delta Air Lines Secures $2.5 Billion Exit Financing, Delta Air Lines
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