MINNEAPOLIS – Northwest Airlines said on Wednesday that its creditors approved its reorganization plan, another key step in its plan to emerge from bankruptcy protection next month.
An unofficial vote tally shows that almost 97 percent of creditors who voted approved the plan, the airline said. Final results will be filed in bankruptcy court in New York later this week.
A confirmation hearing on Northwest's reorganization plan is set to begin May 16, and Northwest has said it expects to emerge from bankruptcy in June. It has been operating under bankruptcy protection since Sept. 14, 2005.
The plan calls for Northwest's secured creditors to be paid in full, so they didn't get to vote on it. Most of Northwest's unsecured creditors are expected to be paid roughly 74 cents on the dollar, payable in shares in the newly reorganized company. The Northwest plan calls for its existing shares to be canceled, and those shareholders would receive nothing.
Last week Eagan-based Northwest Airlines Corp. said it had resolved objections by a group of investors who hold claims in the bankruptcy. The group had objected to several parts of Northwest's plan, such as its poison pill and requirements that two-thirds of shareholders approve any changes to the company's certificate of incorporation and bylaws. Northwest changed the two-thirds vote requirement to a simple majority and said those claims holders had agreed to support the plan.
"We appreciate our creditors' confidence in the Northwest plan of reorganization, which provides creditors with a stake in Northwest Airlines going forward and represents a substantial recovery on their unsecured claims," Northwest President and CEO Doug Steenland said in a prepared statement.