Delta Airlines Files Reorganization Plan to Emerge from Bankruptcy in 2007

Delta Air Lines Inc. filed a reorganization plan with the bankruptcy court Tuesday that calls for it to emerge from Chapter 11 in the spring of 2007 as a standalone company.

The plan is in opposition to an offer by US Airways Group Inc. (LCC) to buy Delta in a hostile bid now worth $8.4 billion.

The Atlanta-based carrier outlined a five-year business plan, and said that its advisers have determined that a reorganized Delta will have a consolidated equity value of roughly $9.4 billion to $12 billion. It said the plan would result in a recovery by Delta's unsecured creditors of roughly 63 percent to 80 percent of their allowed claims.

Delta also said Tuesday that its board has unanimously rejected US Airways' unsolicited offer, which was first disclosed Nov. 15.

"The board concluded that Delta's standalone plan will provide the company's creditors with superior value and greater certainty on a much faster timetable than the US Airways proposal," Delta said in a statement.

There was no immediate comment by Tempe, Ariz.-based US Airways, but an official with knowledge of that company's plans who spoke on condition of anonymity because of the sensitivity of the talks said Monday that US Airways was willing to increase its offer for Delta if Delta could justify it is worth more.