LAWSUITS NEWS & LEGAL INFORMATION
Delta Air Lines Inc.
New York, NY: (Aug-27-07) A lawsuit was brought against Delta Air Lines Inc. by holders of $419 million in bonds that were issued to finance improvements at Cincinnati-Northern Kentucky International Airport. The bonds were tied to Delta's lease payments on the terminal it operated at the airport. After filing for bankruptcy, Delta said it would reject the lease and other agreements with the airport board. The bondholders and the airline instead negotiated a settlement.
Under the accord, Delta rejected its old terminal lease and signed a new lease through 2020. In exchange, all the bondholders received a $260 million unsecured claim against the airline and an $85 million, 8% note maturing in 2015. Sources claimed that while the settlement comprises only a small part of Delta's joint plan of reorganization, its undoing would complicate Delta's rights to an important hub of its operations and therefore risks having some negative effect on Delta's vitality. Holders of about $50 million worth of the bonds appealed the settlement's April approval by US Bankruptcy Judge Adlai Hardin in New York, saying the trustee for the bonds didn't have the right to agree. US District Judge John G. Koeltl in New York rejected the bondholder group's arguments and affirmed the settlement. [SALT LAKE TRIBUNE: BONDHOLDER SETTLEMENT]
Published on Aug-28-07
Under the accord, Delta rejected its old terminal lease and signed a new lease through 2020. In exchange, all the bondholders received a $260 million unsecured claim against the airline and an $85 million, 8% note maturing in 2015. Sources claimed that while the settlement comprises only a small part of Delta's joint plan of reorganization, its undoing would complicate Delta's rights to an important hub of its operations and therefore risks having some negative effect on Delta's vitality. Holders of about $50 million worth of the bonds appealed the settlement's April approval by US Bankruptcy Judge Adlai Hardin in New York, saying the trustee for the bonds didn't have the right to agree. US District Judge John G. Koeltl in New York rejected the bondholder group's arguments and affirmed the settlement. [SALT LAKE TRIBUNE: BONDHOLDER SETTLEMENT]
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