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Bondholders Of Delta Air May Influence USAir’s Takeover BidSeveral hedge funds and two investment banks holding Delta Air Lines bonds have formed an informal committee, which could play an important role as US Airways seeks to persuade Deltas creditors to support its $8.6 billion offer to acquire Delta out of bankruptcy. The existence of the bondholder committee had been previously reported, but most of its members were not publicly known until it filed documents with the bankruptcy court yesterday. Among the panels nine members are Avenue Capital Management, a $12 billion hedge fund that recently sold a minority stake to Morgan Stanley, and Silver Point Capital, a $6 billion hedge fund focused on investing in debt. In its takeover proposal, US Airways estimated the total amount of Deltas unsecured claims at about $16 billion. The court filing yesterday did not indicate how much debt the informal committees members hold. But individual bondholders seeking to nominate themselves to the committee were required to own debt with a face value of at least $200 million, a person close to the committee said. Other members of the unofficial committee include investment banks Deutsche Bank and Lehman Brothers. CarVal Investors, GoldenTree Asset Management, Marathon Asset Management, Trafelet & Company and York Capital Management make up the rest of the panel. A US Airways spokeswoman, Meaghan Repko, said, Appointing a bondholder committee is normal practice, and we look forward to working with all constituencies as we move along in the practice. A Delta spokeswoman, Betsy Talton, said, We will consider what they have to say, even though they are not an officially sanctioned voice in the Chapter 11 process. Alan W. Kornberg, the lawyer with Paul, Weiss, Rifkind, Wharton & Garrison who is advising the committee, said that the roster might not yet be finalized. Dont be surprised if the membership expands, he said. Winning the support of creditors is crucial because Delta is operating under bankruptcy protection and any plan to emerge from bankruptcy must be approved by them. So far, Delta management has said that it intends to file a reorganization plan that allows it to emerge from bankruptcy as a standalone carrier. The official creditors committee, formed by the United States trustee overseeing Deltas bankruptcy case, includes two of Deltas largest unsecured creditors: the Pension Benefit Guaranty Corporation and the Air Line Pilots Association. Earlier this month, the Pension Benefit Guaranty Corporation, the federal agency that takes over insolvent retirement plans, reached an agreement with Delta that would give it an unsecured claim of $2.2 billion. Deltas active pilots previously negotiated a $2.1 billion claim against Deltas estate. Delta has also agreed to give its retired pilots an additional $800 million in unsecured claims. The pilots union has declared its opposition to a US Airways-Delta merger. Tag CloudExternal InformationAdditional InformationIn U.S., Metal Theft Plagues Troubled Neighborhoods...Addenda: 6 Agencies Are Seeking Census Bureau Account... Housing ‘will avoid crash’... Bernanke under pressure to cut rates as markets plunge... Where Am I?News Main Page - Business - Bondholders Of Delta Air May Influence USAir’s Takeover Bid |
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