Bankruptcy

Delta Flies Clear of Bankruptcy

Some 360 million new shares in the airline will trade on the New York Stock Exchange under its old ''DAL'' symbol.
Dave Cook and Stephen TaubApril 30, 2007

After 19 months under Chapter 11, Delta Air Lines announced Monday morning that it had emerged from bankruptcy protection.

“This is a great day in Delta’s history,” said chief executive officer Gerald Grinstein, in a statement.

Some 360 million new shares in the airline will trade on the New York Stock Exchange under its old “DAL” symbol (the bankruptcy rendered the airline’s prebankruptcy shares worthless). According to the Associated Press, unsecured creditors will own between 62 percent and 78 percent of the value of their allowed claims as shares of new Delta stock. The airline will also be emerging from bankruptcy with $2.5 billion in exit financing. Earlier in the month, more than 95 percent of Delta’s creditors voted in favor of the plan.

Now that the airline has emerged from bankruptcy, there is some speculation Delta will sell Comair, its much-maligned regional carrier subsidiary, which has been criticized for lost baggage and flight delays, the Associated Press pointed out.

The wire service noted, however, that last week Grinstein said not to expect any “immediate action” on Comair since the company has a new board of directors. The board will also need to find a successor for Grinstein, who at 74 plans to retire.

Delta filed for bankruptcy on September 14, 2005, saddled by high fuel prices, surging labor costs, and huge retirement benefits expenses.