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Delta's Bankruptcy Exit Plan Clears Hurdle
A week after defeating a hostile takeover bid, Delta Air Lines got clearance to start taxiing toward a departure from bankruptcy court this spring.
After a short hearing Wednesday in New York, U.S. Bankruptcy Judge Adlai Hardin approved Delta's description of its reorganization plan, allowing the Atlanta carrier to begin seeking creditors' backing for the plan.
The decision marks a "momentous" milestone in Delta's nearly 17-month-long trip through Chapter 11 proceedings, said the airline's lead lawyer, Marshall Huebner.
Delta, which said it plans to seek final approval of its reorganization plan at an April 25 hearing, plans to mail notices to creditors in about two weeks.
Creditors will have until April 9 to vote on the plan, which includes the company's plans for issuing new stock to creditors when it emerges.
Delta needs the backing of at least half of the carrier's suppliers, lenders and other unsecured creditors, as well as votes representing at least two-thirds of the dollar value of claims.
