nwafan20
2007-01-05, 08:06 PM
Northwest Airlines says deal to buy its bankrupt feeder carrier Mesaba has been negotiated
The Associated PressPublished: January 5, 2007
MINNEAPOLIS: Northwest Airlines said it has wrapped up a deal to buy bankrupt regional feeder Mesaba, although it was not clear whether Mesaba's parent company was going to accept it.
"An agreement has been negotiated by representatives of Northwest Airlines, Mesaba Airlines, and its unsecured creditor committee. There are no significant open issues requiring further negotiations," Northwest Airlines Corp. spokesman Bill Mellon said on Thursday, reading from a letter the airline filed in Mesaba Aviation Inc.'s bankruptcy case.
The negotiations between the two bankrupt airlines appeared to bypass Mesaba's sole shareholder, MAIR Holdings Inc. The agreement calls for $145 million (€110.6 million) to go to Mesaba's bankruptcy estate, of which MAIR is a creditor. It also includes $10 million (€7.6 million) in cash for Mesaba to use as operating money, said Tim Robinson, an attorney for Mesaba's creditors.
Both carriers are in bankruptcy and Mesaba needs exit financing. Bankruptcy judges in both cases would need to approve the deal.
Mesaba currently has until February to propose its own reorganization plan. But the deal with Northwest calls for Mesaba to file a reorganization plan by Jan. 15, Robinson said. In court papers, Mesaba creditors asked that they be allowed to file their own reorganization plan by that date if Mesaba doesn't, Robinson said. Northwest's own reorganization plan is due the next day, and Mellon said Northwest plans to file its plan by then.
Robinson said that while creditors hope MAIR will go along with the sale, "we cannot afford any delay whatsoever given the time constraints of the Northwest deal."
Mesaba spokeswoman Jane Berg confirmed the filings, which were not immediately available online. She and MAIR spokesman Jon Austin had no immediate comment on the filing.
The Associated PressPublished: January 5, 2007
MINNEAPOLIS: Northwest Airlines said it has wrapped up a deal to buy bankrupt regional feeder Mesaba, although it was not clear whether Mesaba's parent company was going to accept it.
"An agreement has been negotiated by representatives of Northwest Airlines, Mesaba Airlines, and its unsecured creditor committee. There are no significant open issues requiring further negotiations," Northwest Airlines Corp. spokesman Bill Mellon said on Thursday, reading from a letter the airline filed in Mesaba Aviation Inc.'s bankruptcy case.
The negotiations between the two bankrupt airlines appeared to bypass Mesaba's sole shareholder, MAIR Holdings Inc. The agreement calls for $145 million (€110.6 million) to go to Mesaba's bankruptcy estate, of which MAIR is a creditor. It also includes $10 million (€7.6 million) in cash for Mesaba to use as operating money, said Tim Robinson, an attorney for Mesaba's creditors.
Both carriers are in bankruptcy and Mesaba needs exit financing. Bankruptcy judges in both cases would need to approve the deal.
Mesaba currently has until February to propose its own reorganization plan. But the deal with Northwest calls for Mesaba to file a reorganization plan by Jan. 15, Robinson said. In court papers, Mesaba creditors asked that they be allowed to file their own reorganization plan by that date if Mesaba doesn't, Robinson said. Northwest's own reorganization plan is due the next day, and Mellon said Northwest plans to file its plan by then.
Robinson said that while creditors hope MAIR will go along with the sale, "we cannot afford any delay whatsoever given the time constraints of the Northwest deal."
Mesaba spokeswoman Jane Berg confirmed the filings, which were not immediately available online. She and MAIR spokesman Jon Austin had no immediate comment on the filing.