Sun Country Airlines tweaks creditor distributions under amended plan

By Caroline Salls

Pittsburgh, Aug. 4 - Sun Country Airlines filed an amended plan of reorganization and disclosure statement Wednesday with the U.S. Bankruptcy Court for the District of Minnesota that changes the treatment for holders of convenience and unsecured claims and Sun Country equity interests.

Under the amended plan, holders of convenience claims of $100,000 or less will receive cash equal to 40% of their claim and a share of at least 65.6% of net creditor trust proceeds.

Under the previous plan, these creditors were scheduled to recover 20% in cash. The amount of the convenience claim limit was also raised to $100,000 from $50,000.

Holders of general unsecured claims will have a choice of receiving new common stock in the reorganized company or cash payments totaling 35% of their claims.

Under the original plan, unsecured creditors were scheduled to receive 100 shares of new common stock for each $1,000 of allowed claims.

In addition, MN Holdings will retain its equity interests in Sun Country for the benefit of holders of new common stock. Under the previous plan, holders of Sun Country interests would not have received a distribution.

Specific creditor treatment will include:

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

• Holders of City of Los Angeles, Los Angeles World Airports claims, JFK International Airport, LLC claims and Port Authority of NY & NJ - JFK claims will be paid in full in cash;

• Holders of Swissport USA, Inc. claims will be paid in cash by making a draw on the letter of credit securing the claim;

• Holders of other secured claims will receive treatment that will render their claims unimpaired;

• Holders of convenience claims of $100,000 or less will receive cash and creditor trust proceeds;

• Holders of unsecured claims can elect to receive either stock or cash;

• Holders of Petters and Whitebox interests will receive a share of the new common stock remaining after it is distributed to holders of unsecured claims;

• Holders of Sun Country equity interests will retain their interests; and

• Holders of MN Holdings equity interests will receive no distribution.

Sun Country is a subsidiary of Petters Aviation, LLC owner MN Airlines Holding, Inc. The company filed for Chapter 11 bankruptcy on Oct. 6, 2008. Its Chapter 11 case number is 08-35197.

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