Mesaba parent objects to timing on exclusivity period modification request

By Caroline Salls

Pittsburgh, Jan. 8 - Mesaba Aviation, Inc. parent Mair Holdings, Inc. objected to a request from Mesaba's official committee of unsecured creditors to modify the company's exclusivity periods to allow the committee to file a plan that reflects a potential acquisition of Mesaba by Northwest Airlines Corp., according to a Monday filing with the U.S. Bankruptcy Court for the District of Minnesota.

According to the objection, the committee filed the exclusivity motion on Jan. 4 and asked for a hearing on Jan. 9, less than three business days after the motion was filed.

"Given the unusual nature of the relief sought and the speculative allegations included in the exclusivity motion, Mair believes that a longer response time and perhaps limited discovery are appropriate," Mair said in the objection.

In addition, Mair said the motion is premature, because it is based on a potential deadlock on Mesaba's board of directors that might prevent Mesaba from filing a plan during its current exclusivity period.

However, Mair said the committee has failed to cite a single fact that demonstrates an actual deadlock that keeps Mesaba from taking action on the Northwest proposal.

Mair also said there are no Mair "representatives" on Mesaba's board of directors, as the committee contended in the motion. Under Minnesota law, Mair said all four members of Mesaba's board already owe a fiduciary duty to Mair as the company's lone shareholder.

Finally, Mair said it has the right to call witnesses at the hearing on the exclusivity modification, but the short response time does not give it enough time to identify potential witnesses.

Mesaba, an Eagan, Minn.-based Northwest Airlines affiliate, filed for bankruptcy on Oct. 13, 2005. Its Chapter 11 case number is 05-39258.

© 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.