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Creditor Group Expects Delta to Weigh Options Besides Reorganization

An unofficial group of Delta Air Lines creditors said on Friday it looked forward to discussing the carrier's plan to exit bankruptcy, but added it expects the No. 3 U.S. airline to weigh other options.

Delta, which has been operating under Chapter 11 protection since September 2005, earlier this week filed a plan of reorganization that would see it emerge from bankruptcy as an independent carrier, and rejected an $8.3 billion takeover offer from US Airways Group.

The unofficial committee of unsecured claim holders' comments come after a similar statement by Delta's court-approved official committee of unsecured creditors, and a day after US Airways dismissed the stand-alone plan as "unrealistic."

"(It) looks forward to analyzing carefully and discussing with Delta the proposed plan and the assumptions upon which it is based," the unofficial group's financial adviser, Jefferies & Co., said on its behalf. "It expects Delta to consider methodically, proactively and fairly strategic alternatives to its proposed stand-alone Chapter 11 plan."

Delta has repeatedly said it intends to emerge from bankruptcy as an independent carrier and hopes to get creditors to vote on its plan by February or March so that it can exit by spring of 2007.

Creditors holding at least two-thirds of the value of total impaired claims -- debt that will not be repaid in full -- must vote in the plan's favor for it to succeed. The bankruptcy court also needs to approve the plan. Delta assumes a total claim pool of about $15 billion.

The unofficial creditor group, which was formed after US Airways' November 15 bid, has grown to 17 members from nine and now represents more than $2.25 billion of unsecured claims against Delta, according to the statement.

The group is represented by the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP.

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