Redwood City Bankruptcy Attorney Discusses Delta Air Lines Creditors Request Postponement of Bankruptcy Hearing
Redwood City Bankruptcy Attorney Discusses Delta Air Lines Creditors Request Postponement of Bankruptcy Hearing
In the Delta Airlines Chapter 11 bankruptcy case, an adhoc creditors committee for the carrier company is requesting a postponement of a February 7 bankruptcy hearing. The creditors say they want to examine a $9.87 billion offer from US Airways Group Inc. to purchase the bankrupt carrier company.
In a written statement submitted yesterday, the creditors said that the US Airways offer of cash and stock offers a "superior recovery for creditors compared to what they would receive under Delta's standalone Chapter 11 plan." The creditors group is made up of creditors holding approximately $2.4 billion in claims. Previously, the creditors had asked Delta to consider the U.S. Airways offer. Now, they want the official creditors committee to ask Delta to look at the offer.
According to Anne Granfield, a spokeswoman for the ad hoc committee, "As it stands, unless the official committee comes out and says something, creditors won't have a choice."
According to Granfield, US Airways says it will increase its bid amount for Delta as long as the creditors are able to postpone the hearing. US Airways, however, says it has not offered to increase its offer, which will expire on February 1. But the carrier does say that it will withdraw its bid if Delta’s reorganization hearing isn’t postponed by Thursday. US Airways had attempted a hostile takeover to purchase Delta last November.
Delta estimates that its value will be somewhere between $9.4 billion and $12 billion if it exits from Chapter 11 bankruptcy by the middle of the year as a standalone company. Once its disclosure statement, which it submitted in December, is approved, the carrier company can begin soliciting votes to get its reorganization plan approved.
Subchapter 1102 in Chapter 11 of the U.S. Bankruptcy Code offers information about the Creditors’ committee:
§ 1102. Creditors’ and equity security holders’ committees
(a)
(1) Except as provided in paragraph (3), as soon as practicable after the order for relief under chapter 11 of this title, the United States trustee shall appoint a committee of creditors holding unsecured claims and may appoint additional committees of creditors or of equity security holders as the United States trustee deems appropriate.
(2) On request of a party in interest, the court may order the appointment of additional committees of creditors or of equity security holders if necessary to assure adequate representation of creditors or of equity security holders. The United States trustee shall appoint any such committee.
(3) On request of a party in interest in a case in which the debtor is a small business and for cause, the court may order that a committee of creditors not be appointed.
(b)
(1) A committee of creditors appointed under subsection (a) of this section shall ordinarily consist of the persons, willing to serve, that hold the seven largest claims against the debtor of the kinds represented on such committee, or of the members of a committee organized by creditors before the commencement of the case under this chapter, if such committee was fairly chosen and is representative of the different kinds of claims to be represented.
(2) A committee of equity security holders appointed under subsection (a)(2) of this section shall ordinarily consist of the persons, willing to serve, that hold the seven largest amounts of equity securities of the debtor of the kinds represented on such committee.
Sagaria Law, P.C. represents clients in Chapter 7, Chapter 11, and Chapter 13 bankruptcy claims. Many of our bankruptcy clients are businesses and individuals from the cities of Berkeley, Alameda, Foster City, Palo Alto, and San Jose, as well as other cities in Monterey County, Alameda County, and Santa Clara County. To schedule your free consultation, contact Sagaria Law, P.C. today.
Delta creditors want bankruptcy hearing postponed, WNC.com, January 30, 2007
Chapter 11, US Code Collection, Cornell Law School
Related Web Resources:
Corporate Bankruptcy, SEC.gov
