Delta

[Beer Guzzler]

Anybody think that either DL or NW could end up in Chapter 7? With DL's Debt to Credit Ratio wouldn't one think that DL "MAY" end up in chapter 7?

 

[robbedagain]

I highly doubt that Delta would end up in CH7. I cant picture that. they are not as bad as US Air was when they went bk twice. I think that DL will be better post ch11 depending on oil prices

 

[TheDog2004]

Creditors choose Chapter 7 usually as a last resort or when the parts are worth more than the whole. In other words, are the creditors more likely to get more of their money back by selling off Delta piecemeal or by rescuing Delta (and hoping that they become profitable and can make more money in the long run).

I think Delta would be a better candidate for Chapter 7 than others if the other airlines weren't struggling so much. An argument could be made that LGA/DCA/BOS/shuttle, Song, and the most valuable transatlantic routes are worth more piecemeal than all together at Delta, but with no buyer in sight they are basically worthless. So the terrible aviation market and high oil prices actually work in Delta's favor in this regard, IMHO.

 

[Doc]

I highly doubt that Delta would end up in CH7. I cant picture that. they are not as bad as US Air was when they went bk twice. I think that DL will be better post ch11 depending on oil prices

[post="302824"][/post]​

Are you kidding your balance sheet is off the charts. I think it was in the ball park
of.....
26.53 Billion dept
21.26 Billion Assets

Let me know when you shed 6 Billion.

I don't need to do the math. I don't think U was over a billion.

 

[Bagbelt]

There is too much revenue coming in at about $17 billion per year not to reorganise and come out with a merger or as a different animal. Selling assests at fire sale prices isn't going to make anyone happy.

 

[coolflyingfool]

The creditors will not force Dl in to Chap 7. If they didn't force UA or US over the edge, DL is safe in 11. Just my thoughts..........

 

[WorldTraveler]

Actually, DL shed about $5B the day they filed for bankruptcy. DL had the highest percentage of unsecured debt in the industry and that is all about ready to become a few cents on the dollar in stock in a reorganized company.

 

[FWAAA]

Actually, DL shed about $5B the day they filed for bankruptcy. DL had the highest percentage of unsecured debt in the industry and that is all about ready to become a few cents on the dollar in stock in a reorganized company.

[post="305611"][/post]​

$5 billion of unsecured debt? Are you talking about DL's $5.2 billion Pension and Related Benefits liability (from 6/30/05 10-Q)?

DL's other debt on that date consisted of $12.4 billion of LT Debt and Capital Lease obligates plus another $6.4 billion of payments due under operating leases. On top of that, the $5.2 billion of Pension liabilities.

I seriously doubt that DL was able to borrow $5 billion on an unsecured basis, so the $5 billion you mentioned must be the pension liability.

 

[robbedagain]

Are you kidding your balance sheet is off the charts. I think it was in the ball park
of.....
26.53 Billion dept
21.26 Billion Assets

Let me know when you shed 6 Billion.

I don't need to do the math. I don't think U was over a billion.

[post="305362"][/post]​

I am not rich with that kind of dough! but it seemed that with all the problems that the old US had, they were bound for CH7 liquidation. I had always thought that DL was in a much better position.

 

[WorldTraveler]

FWAAA,
May I suggest you send your little mouse for a visit to Delta's 2004 annual report filed on Form 10K with the SEC. On page F-24, DL listed $4,658,000,000 of unsecured debt and $8,886,000,000 of secured debt. In other words, more than 1/3 of Delta's long term debt was unsecured and is likely to have been reduced to a value of about a couple hundred million bucks of stock in the reorganized company. Delta pled with their unsecured creditors for over a year to convert it into equity in the company but they didn't and now will eat their investments.

Pension obligations are not considered long-term debt from a balance sheet perspective; they are a separate item.

 

[robbedagain]

I guess then that the investors will learn a lesson next time that may be they would allow the company to turn the unsecured debt into liquidity. oh well the investors now stand to be the losers and delta the winner to an extent.