Latam Airlines Group SA’s official low-ranking creditor group is unhappy with the Chilean carrier’s bankruptcy exit proposal, arguing a sale to rival Azul SA could leave its members much better off, Bloomberg News reported. In court papers filed on Wednesday, Santiago-based Latam’s unsecured creditor committee said the airline’s current reorganization plan is so unfair that it can’t win court approval. It flouts U.S. bankruptcy rules by favoring some evenly-ranked creditors over others and giving value to shareholders that don’t deserve it, lawyers for the group wrote. “Rather than use the past eighteen months to negotiate and prepare a value-maximizing plan that treats all constituents fairly and in accordance with the Bankruptcy Code, the Debtors have used their exclusive opportunity to negotiate an unconfirmable insider deal at the expense of non-preferred creditors,” lawyers from the Dechert firm wrote on behalf of unsecured creditors. Under the current proposal, Latam locked arms with key shareholders -- Delta Air Lines Inc., Qatar Airways and Chile’s Cueto family -- and a major creditor group on a deal that would raise about $5 billion and slash its debt load. Sixth Street Partners, Sculptor Capital and SVPGlobal are leading the creditor group that has agreed to backstop the plan. The plan would result in creditors taking control of the company, while existing shareholders could retain a sizable ownership stake. That’s unusual in U.S. bankruptcy -- stockholders are last in line to be repaid -- but Latam’s deal would smooth over potentially thorny Chilean securities law issues. Read more.