This shareholder objection was filed with the bankruptcy court last week. Hearing is tomorrow (April 25) at 945am in NYC. Things could get VERY interesting at Pinnacle if this objection is upheld. I'm surprised that there has been no discussion of this on here...


http://dm.epiq11.com/PinnacleAirline...cument/1734794

 

Quick summary of objection filing borrowed from elsewhere...

Delta forces Pinnacle into bankruptcy sooner by not paying them about $35 million that Delta owed them.

Delta offers DIP financing if Pinnacle will agree to insane terms for the loan.

Delta basically rolls a $40+ million debt Pinnacle owes into DIP financing, so that Delta can do everything they can to make sure they get their money, forget the rest of the creditors.

Delta forces Pinnacle to cancel contracts and return aircraft that may be against the best interests of the business.

The rest of the creditors object to all of this because they haven't had a say at all in this bankruptcy case and Delta basically predetermined what Pinnacle must do in bankruptcy.

All of those things seem to be not allowed because a creditor isn't supposed to use DIP financing as a way to coerce the bankrupt company.

 

Sounds like a crap storm brewing. Haven't heard of this 'til now.

 

Sounds like another group of greedy executives intoxicated on their own perceived power.

 

The sad part is the judge is probably going to let them get away with it, because nobody else would give Pinnacle DIP financing.

 

Sounds like the shareholders sniffed out the shenanigans that Delta has been pulling. The only problem with stopping Delta's DIP is nobody else was willing to step up (so we have been told) If the objection is upheld, would we not likely have to move to Chaper 7 since there will be no financing to continue operations?

 

Actually, if you were to read it, it doesn't make any sound at all.

 

Chapter 7 has been thrown around a lot in these threads, but you need to remember the impact of pinnacle liquidating. We operate roughly 190(not sure) planes for one carrier. Forget the fact that its our DIP provider for a second. If we liquidate, now correct me if I'm wrong, those planes stop flying immediately right? That would have a huge impact on the transportation system and I doubt any federal judge would want a part in that. Second, how much does pinnacle have in liquid assets? I would venture to guess that it wouldn't come close to covering even a fraction of the debt. I don't think one creditor will be able to sway the dip loan. Now if all the creditors teamed up I think we would have something to worry about.

Now I'm starting to see why Menke is leaving. Maybe he didn't want to be any part of this sham tactic. They wanted him to do something he didn't agree with and stood up for himself while Spanjers was in the background cutting deals with Daddy D.

 

Yeah, this motion will be rejected because it would cause Chapter 7. As I've said before, Delta bankrupted us by not paying us for the merger costs. This is because Colgan was integrated in, and Delta was not going to pay for any of that.

Now Delta sees an opportunity here for us and it is not related to parking 200's; The question is, what is that plan? My guess would be it has something to do with Comair.

 

Delta hasn't even paid us for the rate adjustments in the new pilot contract. They haven't reimbursed us for all of last year. 10k reports filing by Pinnacle state the adjustment for last year would be 18 million and an additional 15-17 million each year after. But Delta doesn't want to pay up, thus causing Pinnacle to file BK.

So here we are now in BK, negotiating with Delta. We'll take pay cuts, Delta will save money. They even stated in the BK filing, that when labor costs get reduced Delta will pay us more money. Its one big sham. Similar to Mesaba's shamruptcy. Now with Menke out and Spanjers at the controls, Delta calls the shots and doesn't want to pay us to support the United money losing operation.

If you look at the 13 week budget Pinnacle posted, as of Friday 4/27 we'll still have 35.5 mil in cash without any DIP. If Delta would have paid us the 18 mil from last year and about 5 mil for the 4 months of this year, that's an additional 23 mil for a total of 58 million in cash.

I think CNBC should add this to their "American Greed" show.