Aeromexico Creditors Lobby Airline’s Backer Delta Over Bankruptcy Exit Plan

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Grupo Aeroméxico SA B de CV is roiling some of its creditors with a restructuring plan that sets aside an ownership stake for its partner and part-owner Delta Air Lines Inc. while paying a fraction of some of its debts, WSJ Pro Bankruptcy reported. Creditors including Invictus Global Management LLC, Hein Park Capital Group LLC and Livello Capital Management LP are criticizing a restructuring proposal from Aeromexico, which filed for chapter 11 last year, that would allocate less than 15 cents on the dollar to some unsecured debts while offering similar creditors and other third parties a stake in the reorganized airline. Invictus said in a letter to Delta, Aeromexico’s largest shareholder, on Tuesday that the restructuring “could be on the verge of devolving into protracted litigation because value is not currently being distributed in a lawful manner.” If approved in the U.S. Bankruptcy Court in New York, Aeromexico’s restructuring proposal would lock in commitments from financial institutions to supply money the company needs to exit chapter 11. Aeromexico filed for bankruptcy protection in the early months of Covid-19’s global spread, one of three major Latin American carriers to seek U.S. bankruptcy protection during the pandemic. The company’s current restructuring plan depends on raising $1.4 billion in exit financing that would position Delta, Aeromexico’s largest shareholder, to retain a roughly 20% stake, court records show. Read more. (Subscription required.)