Mesaba Aviation Inc. has agreed to sell its unsecured claim against Northwest Airlines for $125 million to the Goldman Sachs Group Inc., clearing the way for the completion of a deal that would allow Northwest to acquire the regional carrier.
New York-based Goldman Sachs won the unsecured claim at a telephone auction Monday, bidding 86 percent on the total value of the $145 million claim, according to court papers.
Under Northwest's Chapter 11 reorganization plan, unsecured creditors will be paid in stock, likely giving Goldman Sachs a stake in the airline when it emerges from bankruptcy.
It's unclear what the stock will be worth, but an unofficial group of Northwest's shareholders has said in court documents that shares of the reorganized airline, which plans to emerge from bankruptcy this year, should be worth at least $17.30 each.
St. Paul, Minn.-based Mesaba claimed Eagan, Minn.-based Northwest owes it $145 million in fees, lost profits, unreimbursed expenses and related costs after Northwest cut the feeder carrier's fleet by 28 percent, missed $30 million in payments and failed to deliver aircraft.
Mesaba's deal is contingent upon Northwest's Chapter 11 case officially honoring the $145 million, which Northwest said it would do in exchange for acquiring the regional carrier.
U.S. Bankruptcy Court judges in Manhattan and Minneapolis will need to approve both ends of the deal.
Mesaba filed for Chapter 11 in the U.S. Bankruptcy Court in Minneapolis in October 2005, about a month after Northwest sought bankruptcy protection in the U.S. Bankruptcy Court in Manhattan.
Mesaba, a unit of Mair Holdings, plans to pay its debts in full using the proceeds of the sale of the Northwest claim. Mesaba said it expects to emerge from bankruptcy in mid-April.
The Minneapolis bankruptcy court is slated to review the sale of the claim to Goldman Sachs at a hearing Tuesday afternoon. |
