Mesa Air Group, Delta agree to settle claims, pre-bankruptcy lawsuits

By Caroline Salls

Pittsburgh, Jan. 5 - Mesa Air Group, Inc. requested court approval of a settlement with Delta Air Lines, Inc. that resolves a series of claims and pre-bankruptcy actions, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Delta filed a $40 million disputed claim against Mesa Air in May 2010 and a $27.75 million disputed claim against Mesa debtor Freedom Airlines, Inc.

The parties were also part of several lawsuits, including:

• A suit filed by Mesa and Freedom to keep Delta from terminating a regional jet aircraft connection agreement. Mesa and Freedom have appealed a $2.94 million judgment in favor of Delta in this case;

• A suit filed by the Mesa debtors to keep Delta seeking damages associated with the costs of retraining pilots in connection with termination of a connection carrier agreement;

• A lawsuit filed by the Mesa debtors seeking the return of seven aircraft engines. A court ruled that Delta had forfeited its $4.63 million in lien claims after the engines were returned; and

• A suit filed by Delta seeking $20 million in damages in connection with an alleged breach of a code-share agreement.

In addition to the litigation claims, Mesa said Delta's claims include non-litigation claims. These include a $1.52 million claim for a delinquent December 2008 true-up payment; a claim for indemnification of passenger amenities expenses in excess of $3 million; a $16,869 claim for a delinquent fuel true-up; a $271,774 claim for reimbursement of fuel expenses; $15.75 million in claims for outstanding hangar space rent; a $2,016 claim for employee pleasure travel expenses; a $1.98 million claim for cargo services and a $6.79 million claim for maintenance services.

Under the settlement, Delta will have a $3,282 general unsecured claim against Mesa and a $7.26 million general unsecured claim against Freedom.

All other claims will be disallowed, and the lawsuits will be dismissed.

A hearing is scheduled for Jan. 26.

Mesa Air, a Phoenix-based provider of passenger and airfreight services, filed for bankruptcy on Jan. 5, 2010. The Chapter 11 case number is 10-10018.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.