Delta Air Lines Inc.'s reorganization plan can't be approved

[deltawatch]

Los Angeles Objects to Delta Plan
Thursday January 25, 4:08 pm ET
By Harry R. Weber, AP Business Writer

Communities Object to Disclosure Statement to Delta Chap. 11 Plan


ATLANTA (AP) -- The city of Los Angeles said in a bankruptcy court filing Thursday that Delta Air Lines Inc.'s reorganization plan can't be approved because of undue authority it gives the company to reject certain leases.

http://biz.yahoo.com/ap/070125/delta_bankruptcy.html?.v=5

 

[Gilding the Lily]

Los Angeles Objects to Delta Plan
Thursday January 25, 4:08 pm ET
By Harry R. Weber, AP Business Writer

Communities Object to Disclosure Statement to Delta Chap. 11 Plan
ATLANTA (AP) -- The city of Los Angeles said in a bankruptcy court filing Thursday that Delta Air Lines Inc.'s reorganization plan can't be approved because of undue authority it gives the company to reject certain leases.

http://biz.yahoo.com/ap/070125/delta_bankruptcy.html?.v=5

I suspect, as the article briefly noted, that the Judge will read the briefs and then, at the motion call, tell the airports to save their arguments for the "POR hearing." Just because, as the airports suggest, a plan may not have any possibility of being approved does not, in turn, mean that the disclosure statement is automatically inadequate. Those airports will need additional reasons, beyond what is mentioned in this article, to have a shot during the disclosure statement hearing.

 

[osunut]

I suspect, as the article briefly noted, that the Judge will read the briefs and then, at the motion call, tell the airports to save their arguments for the "POR hearing." Just because, as the airports suggest, a plan may not have any possibility of being approved does not, in turn, mean that the disclosure statement is automatically inadequate. Those airports will need additional reasons, beyond what is mentioned in this article, to have a shot during the disclosure statement hearing.

Also note that Wells Fargo, Bank of New York and the ad hoc committe of creditors also filed objections. In reading several articles besides the one noted they all point to the fact that DL has not disclosed the financial and operational need to terminate leases.

Why would you terminate lease space if you are increasing operations?

While true that these are common issues in the BK process, it does show that not only property owners, but financial institutions have several more questions to what DL has put out. When you read though all of the DL filings to the court, they are not too detailed in several areas, which is why the airports want clarification.

Just something to think about.....