Say They Expect Airline To Consider Other Than
'Stand-Alone' Options
Emerging from bankruptcy as
an independent, stand-alone carrier should not be the only option
on Delta's table, according to a group of the airline's
creditors.
Those creditors include Deutsche Bank Securities and Lehman
Brothers, as well as bond holders, hedge funds and other investors,
who hold approximately $2.25 billion in unsecured claims against
Delta. Their comments to Reuters suggesting that Delta consider
partnerships may be a sign all its creditors are not confident that
the "independent Delta" plan is the best option.
As a group, Delta's creditors are officially represented by a
nine-member, court-approved committee. The ad hoc group speaking
publicly last week, known as the Unofficial Committee of Unsecured
Claimholders, emerged soon after US Airways' November 15
bid. Its spokesman says it's seeking a greater say in
Delta's future.
The unofficial creditor group has 17 members, up from nine on
December 6, according to its statement last week. A number of
members have been Delta investors for years, said one source.
"(It) [the ad hoc group] looks forward to analyzing carefully
and discussing with Delta the proposed plan and the assumptions
upon which it is based," the unofficial group's financial adviser,
Jefferies & Co., said on its behalf. "It expects Delta to
consider methodically, proactively and fairly strategic
alternatives to its proposed stand-alone Chapter 11 plan."
Delta has been operating under Chapter 11 protection since
September 2005 and filed a plan of reorganization earlier this
month that would see it emerge from bankruptcy as an independent
carrier, rejecting an $8.3 billion takeover offer from US Airways
Group.
Creditors holding at least two-thirds of the value of total
impaired claims - debt that will not be repaid in full - must vote
in the plan's favor for it to succeed, according to Reuters. The
bankruptcy court also needs to approve the plan.
Delta assumes a total claim pool of about $15 billion, but has
repeatedly said it intends to emerge from bankruptcy as an
independent carrier. It hopes to get creditors to vote on its plan
by February or March so that it can exit bankruptcy by spring.
The ad hoc group would like to hire former Continental Airlines
Chief Executive Gordon Bethune as a consultant, according to a
bankruptcy court filing. Bethune retired from Continental in 2004
after more than a decade of service. He is currently chairman of
Aloha Airlines parent Aloha Airgroup.
After Delta announced its reorganization plan last week,
however, Chief Executive Gerald Grinstein said the airline would
not want to be left out "if the process of (airline industry)
consolidation starts."
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