Delta Pushes Ahead on Standalone Plan
Saturday, January 13, 2007; 4:36 AM
ATLANTA -- Delta Air Lines Inc., the nation's third-largest carrier, pushed ahead Friday with its effort to emerge from bankruptcy as a standalone company by formally asking the court to approve the disclosure statement to its reorganization plan.
If the statement, which includes details of the airline's operations, is approved at a hearing scheduled for Feb. 7, Atlanta-based Delta could begin soliciting votes to approve the reorganization plan.
In court papers filed Friday night, Delta said it is asking that April 9 be set as the voting deadline for the reorganization plan and that a confirmation hearing be held April 25. It said the voting deadline could be extended if necessary.
Delta has said it hopes to emerge from Chapter 11 by the middle of this year. It faces a hostile $10.4 billion buyout bid by Tempe, Ariz.-based US Airways Group Inc., which is asking that the hearing on the disclosure statement be postponed and that Delta's official unsecured creditors committee show support for opening up Delta's books to US Airways.
The official committee has been silent about its position since US Airways upped its offer by nearly 20 percent on Wednesday. Delta has said repeatedly that it opposes a merger with US Airways, but its creditors will play a key role in deciding the airline's future course.
The question is whether they want to take the money US Airways is offering and run the risk of a long regulatory fight, or stick with Delta's plan to emerge from bankruptcy as a standalone company worth $9.4 billion to $12 billion. Any other bids that could come in from other carriers also could add to the mix. As of last month, Delta said there hadn't been any other offers.
An unofficial group of unsecured creditors has called on Delta "to provide thoughtful and unbiased consideration" to the enhanced offer by US Airways.
Delta management has argued that the combination of US Airways and Delta would not receive regulatory approval because of the overlap of the two carriers' routes. US Airways says there wouldn't be any regulatory holdup.
Delta said in the court filing Friday that its disclosure statement related to its reorganization plan, which it filed Dec. 19, meets bankruptcy court requirements and should be approved.