Indy319FA
Starving Regional Pilot
- Joined
- Feb 24, 2005
- Posts
- 434
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
I was surprised the company (and Delta) didn't do more to get these other creditors on board. If no one objects, then there is no issue. Now that these creditors are objecting, its hard to see how the court can approve this given Delta's actions with the DIP loan (i.e. using it to pay back the 44 million Pinnacle owes Delta). Apparently these creditors are convinced they will see a better return in Chapter 7 or think the company can find a better deal for DIP financing. My guess is they think Chapter 7 is better for them unless Menke was lying about being turned down by other institutions for financing.
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.
I'd call the provision to pay the full $44 million outstanding on the Delta promissory note some solid evidence. It was pretty brazen for Delta to demand that when other creditors will be forced to settle for far less than they are owed. My guess is the company and Delta were hoping the other creditors would feel their best interests are served by allowing Delta to do this so the company could get financing. Obviously some now object, so it will be interesting to see how the court handles this.
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