Northwest gets court approval to repay $15.3 million GMAC promissory note

By Caroline Salls

Pittsburgh, Feb. 6 - Northwest Airlines Corp. obtained court approval to repay in full a $15.3 million promissory note held by GMAC Commercial Finance LLC, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the motion, the note is secured by nearly 1,000 pieces of Northwest's ground equipment that support its operations at airports throughout the country.

Northwest said the value of the equipment substantially exceeds the amount outstanding under the note, and the note matured on Jan. 1.

Currently, Northwest is paying interest on the note as adequate protection, and the company said the interest rate is not favorable to the estate.

Given the relatively small amount outstanding under the note and hindrances on the company's administration of the ground equipment collateral, Northwest said the note represents an administrative burden on the estate.

As a result, the company said repaying the note will provide interest expense savings and operational flexibility.

Northwest, an Eagan, Minn.-based airline, filed for bankruptcy on Sept. 14, 2005. Its Chapter 11 case number is 05-17930.

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