Objection to Delta's DIP financing for Pinnacle

[CRJ puppy]

This objection was filed last week. Hearing tomorrow (April 25) at 945am in NYC. Things could get VERY interesting for Pinnacle if this objection to Delta's DIP financing is upheld. Surprised there's been no discussion of this on here...

http://dm.epiq11.com/PinnacleAirlines/Document/GetDocument/1734794

 

[CRJ puppy]

Quick summary of filing borrowed from elsewhere...

Delta forces Pinnacle into bankruptcy sooner by not paying them about $35 million that Delta owed them.

Delta offers DIP financing if Pinnacle will agree to insane terms for the loan.

Delta basically rolls a $40+ million debt Pinnacle owes into DIP financing, so that Delta can do everything they can to make sure they get their money, forget the rest of the creditors.

Delta forces Pinnacle to cancel contracts and return aircraft that may be against the best interests of the business.

The rest of the creditors object to all of this because they haven't had a say at all in this bankruptcy case and Delta basically predetermined what Pinnacle must do in bankruptcy.

All of those things seem to be not allowed because a creditor isn't supposed to use DIP financing as a way to coerce the bankrupt company.

 

[FOrever85]

Filed the 18th, Menke out the 19th. In comes Delta's lap dog Spanjers. I'm sure that was all just a coincidence.

 

[jynxyjericho]

Definitely some BS going on.

 

[Oakum_Boy]

New Delta modus operandi: destroy your Connection carriers and strong arm them in bankruptcy. Who's next? Pretty sure XJT/SKYW won't put up with that noise.

 

[jynxyjericho]

It appears Trenary and Menke got Pinnacle into a really bad spot and the investors are calling them on it. It's kind of looking like Pinnacle is just damned.

 

[JumpersAway]

New Delta modus operandi: destroy your Connection carriers and strong arm them in bankruptcy. Who's next? Pretty sure XJT/SKYW won't put up with that noise.

In this business, it's not as if there are many options. What else we going to do? Who else can we fly for?

 

[Indy319FA]

Filed the 18th, Menke out the 19th. In comes Delta's lap dog Spanjers. I'm sure that was all just a coincidence.

Probably because Menke is not stupid and knows something about bankruptcy law. Look up Sub Rosa bankruptcy. Its clearly established in bankruptcy case law that a creditor cannot improve its position by providing DIP financing. Don't be surprised if this motion is granted and the DIP goes away. If that happens it looks like Chapter 7 will be the only option.

 

[nerjdriver]

This objection was filed last week. Hearing tomorrow (April 25) at 945am in NYC. Things could get VERY interesting for Pinnacle if this objection to Delta's DIP financing is upheld. Surprised there's been no discussion of this on here...

http://dm.epiq11.com/PinnacleAirlines/Document/GetDocument/1734794

This is pretty standard in any merger/acquisition, bankruptcy and so on. That's why nobody cares. The objection will be set aside so nothing to see here.

 

[Simon Says]

Probably because Menke is not stupid and knows something about bankruptcy law. Look up Sub Rosa bankruptcy. Its clearly established in bankruptcy case law that a creditor cannot improve its position by providing DIP financing. Don't be surprised if this motion is granted and the DIP goes away. If that happens it looks like Chapter 7 will be the only option.

The bankruptcy, I believe, is not subrosa (which is defined as "secret"). Being subrosa and associating it with the Chrysler bankruptcy is a leap, but could be argued in court. I believe that Delta being our DIP financier could be seen as the wolf in the chicken coup, but I think will be seen by the court as above board.

As to your statement as the DIP financier not improving its standing as a creditor is true, but try to prove that in court is another thing.

Looking forward to the future of the shell game.

BTW, I am not a lawyer, but I play one on flightinfo.com