Latam Airlines Chapter 11 plan appeals denied by bankruptcy court

By Sarah Lizee

Olympia, Wash., Aug. 31 – Latam Airlines Group, SA is closer to emerging from Chapter 11 bankruptcy now that appeals from two creditor groups have been shot down by the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the company’s plan was confirmed by the New York court in June. The confirmation order drew appeals from a group of TLA claimholders and an informal group of unsecured claimholders.

The court said in documents filed Wednesday that the arguments within the appeals, which had to do with the backstop agreement under the plan, were without merit.

Latam said in a recent press release that it hopes to emerge from the Chapter 11 process by the end of the year.

Once effective, the plan will inject roughly $8 billion through a combination of a capital increase, the issuance of convertible bonds and new debt. This includes $5.4 billion of financing backed by major shareholders Delta Air Lines, Qatar Airways and Grupo Cueto, and Latam's major creditors, the parent ad hoc group creditors and some local bondholders.

Latam Airlines is a Santiago, Chile-based airline. The company filed bankruptcy on May 25, 2020 under Chapter 11 case number 20-11254.

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