Mesa Air Group plan of reorganization confirmed by bankruptcy court

By Caroline Salls

Pittsburgh, Jan. 20 - Mesa Air Group, Inc.'s plan of reorganization was confirmed Thursday by the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the plan calls for the reorganization of the company through the issuance of new common stock by the ultimate corporate parent, which will be reorganized Mesa Air Group, as well as the issuance of new 8% notes in two series and a five-year $6.8 million U.S. Air note issued by reorganized Mesa Air Group.

Also, U.S. Airways will receive roughly 10% of the new common stock in consideration of its code-share amendment.

The reorganized company will also issue new warrants to acquire shares of new common stock.

Treatment of creditors will include:

• Holders of administrative claims, priority tax claims and priority non-tax claims will be paid in full;

• Holders of secured claims will either receive a cash payment, receive the collateral securing their claims or have their claims rendered unimpaired;

• Holders of general unsecured claims who are U.S. citizens and 510(a) subrogation claims will receive a share of the restructured unsecured equity and the new 8% notes;

• Holders of general unsecured claims who are not U.S. citizens will receive warrants and new series B 8% notes;

• 2012 noteholders will receive a share of new series A 8% notes; and

• Interest holders will receive no distribution.

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.

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