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Creditors Vote to OK Delta's Reorganization Plan

Creditors Vote to OK Delta's Reorganization Plan



Estimated read time: 2-3 minutes

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ATLANTA (AP) -- Official voting results filed in bankruptcy court late Wednesday show Delta Air Lines Inc. received overwhelming creditor approval of its reorganization plan.

The Atlanta-based company has a confirmation hearing scheduled for April 25, at which Delta will ask the court to sign off on the plan and allow the nation's third-largest carrier to emerge from Chapter 11 protection at the end of the month.

Typically, in each class of creditors, Delta's plan would have to be approved by holders of two-thirds of the claims and a majority of the number of individual creditors for it to pass.

According to the final results certified by Financial Balloting Group LLC of New York, one of two voting agents assigned to tabulate the vote, between 95 percent and 99 percent of creditors in three classes voted in favor of Delta's plan. Holders of a similar amount of unsecured claims also voted for the plan, the results show.

Delta subsidiary Comair Inc. received similar creditor support for its reorganization plan, the results certified by FBG show. Delta has said previously it may sell or spin off Erlanger, Ky.-based Comair after it leaves bankruptcy.

Some ballots were not counted because they were sent in late or were sent by claimholders who were not entitled to vote.

The final results were in line with unofficial results that Delta released Monday.

Delta's reorganization plan calls for unsecured creditors to get between 62 percent and 78 percent of the amount of their allowed claims. The recoveries will be paid in shares of new Delta stock. Delta's existing stock will be canceled when it emerges from bankruptcy.

Delta has estimated it will be worth $9.4 billion to $12 billion when it emerges from Chapter 11.

Delta and Comair filed for bankruptcy protection on Sept. 14, 2005. Eagan, Minn.-based Northwest Airlines Corp. filed for Chapter 11 the same day.

In January, Delta successfully fended off a hostile takeover bid launched by Tempe, Ariz.-based US Airways Group Inc. Delta plans to emerge from Chapter 11 as an independent company.

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On the Net: Delta Air Lines Inc.: http://www.delta.com

(Copyright 2007 by The Associated Press. All Rights Reserved.)

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