Pinnacle Airlines' joint plan of reorganization confirmed by court

By Jim Witters

Wilmington, Del., April 17 - Pinnacle Airlines Corp.'s joint plan of reorganization has been confirmed, according to an April 17 filing with the U.S. Bankruptcy Court for the Southern District of New York.

Pinnacle said in January that it would enter into a restructuring support agreement under which Delta Air Lines Inc. would fund Pinnacle's emergence from Chapter 11 in exchange for 100% of the company's new common stock.

Plan terms

Under the confirmed plan:

• Administrative claims, priority tax claims and priority claims will be paid in full;

• A portion of Delta's debtor-in-possession credit agreement claims will convert into an exit facility. The remaining balance of the DIP claims will convert into equity in the reorganized company;

• The obligations under the company's CIT Bank credit agreement will be reinstated;

• The company's Export Development Canada facilities will be amended, and Pinnacle will perform all obligations under those facilities;

• Holders of other secured claims will either be paid in full in cash, have their claims reinstated, receive the proceeds from the sale of the collateral securing their claims or receive the collateral securing their claims;

• Holders of union claims, punitive damages claims and other general unsecured claims will receive a share of senior trust interests;

• Existing equity interests in the company will be canceled, and holders will receive no distribution;

• Holders of section 510(b) claims will receive no distribution; and

• Interests in subsidiary debtors will be reinstated.

Pinnacle, a Memphis-based operator of a regional airline, filed for bankruptcy on April 1, 2012. Its Chapter 11 case number is 12-11343.

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