Delta sets the date for reorg plan

[pit_needs_help]

http://yahoo.reuters.com/financeQuoteCompa...n2851980_newsml
Should know if creditors like stand-alone plan by April

 

[Smitty]

http://yahoo.reuters.com/financeQuoteCompa...n2851980_newsml
Should know if creditors like stand-alone plan by April

I hope we know by mid-april and I hope that the creditors accept Delta's plan.

But I have a gut feeling that Bethune will empower the creditors. I think he will have some insider knowledge that the creditors do not currently have from their other experts. I think he will use that knowledge to take his known hard-numbers from Delta and supply that to the US Airways plan. This way, creditors can compare apples to apples. I really hope though that even after the comparison, Bethune will convince them that they should accept the Delta plan.

 

[Nor'Easta]

Maybe he doesn't have the DL/US plan on his mind? I think he would be looking at DL/CO if a merger was on his mind.

 

[Smitty]

He is being paid by the creditors. His job description, as supplied to the court, is to "advise the creditors... anlyzing any merger... including the US Airways proposal." I am sure that he has the DL/US offer on his mind, considering that the creditors have only seen a Delta plan and a US Airways offer.

 

[NYCDelta]

I would be very surprised if no other offers come up between now and then.

 

[bigbusdrvr]

I would be very surprised if no other offers come up between now and then.

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A split between Usairways n UAL n NW seems rational....

 

[NYCDelta]

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A split between Usairways n UAL n NW seems rational....

Maybe to you. I was thinking more along the lines of DL/UA, or DL/NW, or DL/CO, or any other combination that might make more sense.

 

[bigbusdrvr]

Maybe to you. I was thinking more along the lines of DL/UA, or DL/NW, or DL/CO, or any other combination that might make more sense.

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Creditors want return.....Cash is King......

If no cash from USAIRways.... then cash from someone for parts......

Nobody appreciates employee value but the employee themselves....sorry.....

Stock in delta is an unknown...what value will it be....how do I sell that to my shareholders.....

Cash is an easy sell....

 

[NYCDelta]

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Creditors want return.....Cash is King......

If no cash from USAIRways.... then cash from someone for parts......

Why must it be either/or. EITHER US will buy DL, OR DL will be sold off piecemeal. Was United sold off in parts? Was CO sold off in parts during their two-time BK? Or Usair? Or America West? Or NWA? Why not buy their "parts"-at least they have Asia.
Gordon Bethune will be looking at the "big picture" and making a recommendation to the creditors. I wouldn't be surprised if he recommends a merger-just not with US. I don't think he'll recommend selling DL off in parts. But, why argue about something that we won't know for sure until February? Right now, everything is speculation.

 

[757inthebarrel]

A huge point is that the creditors get no cash or any payout for that matter until the deal is approved by the regulators. That will be at least a year or more. They will receive payout from a standalone DL in the spring. There is really no comparison for them. Take the sure payout very soon or wait for endless regulatory committees to review this. States and agencies will sue and tie this up for a very long time. All this time LCC stock will probably sink even more (its P/E is 116), making the deal even less valuable.

Also, it is very obvious that this is an attempt to eliminate a competitor who will emerge with lower costs, a higher RASM, and a better product than US. The DOJ will have no trouble seeing this. This deal is dead, in my opinion.

 

[bigbusdrvr]

A huge point is that the creditors get no cash or any payout for that matter until the deal is approved by the regulators. That will be at least a year or more. They will receive payout from a standalone DL in the spring. There is really no comparison for them. Take the sure payout very soon or wait for endless regulatory committees to review this. States and agencies will sue and tie this up for a very long time. All this time LCC stock will probably sink even more (its P/E is 116), making the deal even less valuable.

Also, it is very obvious that this is an attempt to eliminate a competitor who will emerge with lower costs, a higher RASM, and a better product than US. The DOJ will have no trouble seeing this. This deal is dead, in my opinion.

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I didnt realize Deltas POR had a cash payout to the creditors. How do they put a value on the stock? How does that work?

 

[BoeingBoy]

I didnt realize Deltas POR had a cash payout to the creditors.

Actually there is a cash payout for two classes of unsecured creditors - those holding administrative claims and those holding priority tax claims. That's fairly standsrd since these two groups have "dibs" but no collateral backing their claim - i.e. they're not secured creditors but they are unimpaired creditors.

How do they put a value on the stock? How does that work?

Pretty much the same way it worked in US's BK1 & BK2, UA's BK, NW's BK, CO's BK1 & BK2, HP's BK, or any other big BK where the creditors get stock (whether or not some cash accompanies that stock). Somebody (like Blackstone) puts a value on the company and that divided by the number of shares issued sets an initial value. Once trading starts, the marketplace decides.

Jim

 

[phasersonstun2]

I would be very surprised if no other offers come up between now and then.

Other offers are certain to come, and don't rule out the carriers such as Alaska (YES, AK) because they have a warehouse of cash.